One of the most important aspects of a disability insurance policy is the renewability provision. How long can you expect coverage to continue, assuming premiums are paid as due? Look for coverage that contains the following renewability provisions:
A guaranteed renewable policy cannot be canceled by the insurance company even if a change in your circumstances would make you a greater risk. Furthermore, the insurance company cannot make any changes to the provisions of the policy, or add any restrictions.
However, with a guaranteed renewable policy, the company does not guarantee that the premium will remain the same. The company still reserves the right to raise premiums for all policies in a given class. So, even though premium increases must be justified by statistics and approved by state regulators, the owner of a policy which is only guaranteed renewable doesn’t really know how high his or premiums might go.
There is a type of individual disability insurance available which offers an insured a guaranteed future premium. This is known as noncancelable (or just noncan for short).
The best policies on the market are both noncancellable and guaranteed renewable, meaning that the company agrees to:
1. Continue to renew the policy;
2. In the form it was issued;
3. Without increasing the premium;
4. At least until the insured reaches age 65
Other Policy Provisions:
Own Occupation Definition and other definitions of Total Disability
Waiver of Premium
Capital Sum Benefit
Transplant and Cosmetic Surgery Benefit
Exclusions and Limitations
Request a Disability Quote to view the policy differences.