Florida Insurance Claims Adjuster License Practice Exam

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Which of the following describes a Guaranteed Renewable Policy?

  1. The insurer is required to renew to a stated age with no increase in premiums

  2. None of the above

  3. The insurer is required to renew to a stated age, but may increase premium

  4. The insurer cannot cancel during the policy term, but reserves the right to non-renew

The correct answer is: The insurer is required to renew to a stated age, but may increase premium

A Guaranteed Renewable Policy is an insurance policy that the insurer is required to renew until a specified age, but they may increase the premium at any point. This means that the policy is guaranteed to be renewed as long as the premiums continue to be paid, but the insurer has the right to increase the premium amount. Option A is incorrect because it states that there will be no increase in premiums, which is not true for a Guaranteed Renewable Policy. Option B is incorrect because it states that none of the options are correct, but that is not true as C is the correct answer. Option D is incorrect because it states that the insurer cannot cancel the policy, which is not true for a Guaranteed Renewable Policy. The insurer has the right to non-renew the policy, but they cannot cancel it during the policy term.

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