Learn the Lingo: What Does Guaranteed Renewable Mean?

When it comes to insurance options, there’s a lot of lingo, and today, we’re looking at the term guaranteed renewable. We often get asked this question: what does guaranteed renewable mean?

For many seniors and baby boomers, being dropped from your insurance coverage is a huge concern. In the past, perhaps you had an insurance policy and were kicked off because of claims or health changes.

We have good news – many senior-focused insurance products are guaranteed renewable, which means your insurance policy cannot be cancelled by the insurance company unless you stop paying your premiums. Even if you develop a chronic health condition and have tons of claims, you can have the peace of mind that your insurance will stay put.

So, to make things simple, the term guaranteed renewable means that you have a guarantee from the insurance company that your policy will renew each year.

Maybe you’ve heard some of these terms:

• Guaranteed renewable rider
• Conditionally renewable
• Non cancelable policy
• Optionally renewable policy

...it can get overwhelming when there’s tons of terms that seem to mean the same(ish) thing.

So, here’s a quick definition for these terms in case you come across them.

A guaranteed renewable rider is a feature you can add to your insurance (if it doesn’t come with this feature already) that makes sure you’ll never be dropped from your policy as long as you’re paying your premiums on time.

A conditionally renewable insurance policy means that your insurer can drop you under certain conditions.

A non cancelable policy is a policy that the insurance company can’t cancel – they also can’t increase your premiums or reduce your benefits as long as you’re paying your premiums.

An optionally renewable policy means that your insurer can cancel your policy at the anniversary or premium due date.

At the end of the day, if your policy is guaranteed renewable or non cancelable, that’s a great feature to have.

It cuts out any surprises and gives you peace of mind that your insurance isn’t going anywhere as long as you’re paying for it.

Are Medicare supplement plans guaranteed renewable?

Good news! All Medicare Supplement plans are guaranteed renewable.

You’ll often see this as a special feature on a Medicare supplement brochure, and it’s definitely very nice to have, but know that all Medicare supplements have the guaranteed renewable feature.

If anyone tries to say that a certain Medicare supplement is better than another based on the guaranteed renewable feature, you’ll know that all supplements have this.

And remember that this means you will always be able to keep your Medicare supplement for as long as you are paying your premiums on time. You can avoid losing your plan by setting up automatic payments with your agent rather than having to remember to send in a check each month.

Are all LTC policies guaranteed renewable?

Long-term care (LTC) insurance policies are guaranteed renewable, meaning that you won’t be kicked off of your plan as long as you’re keeping up with your premium payments.

However, just because you have a guaranteed renewable long term care policy doesn’t mean that your rates won’t go up.

With LTC insurance, you will experience rate increases – it’s just part of having a long-term care insurance policy.

Are all life insurance policies guaranteed renewable?

On to life insurance – what is guaranteed renewable life insurance? There are a lot of different life insurance policies to choose from, including term life insurance, permanent life insurance, and final expense insurance.

If you’re a senior, you’re going to be better suited for a permanent or final expense insurance policy. Both permanent life insurance and final expense insurance are guaranteed renewable.

As for term life insurance, your policy is only guaranteed renewable until the term is up. So, if you purchase a 30-year term, your policy will stay in place until that 30 years is up.

However, once those 30 years are up, your policy expires, and you have a conversion option. For example, you may be able to convert your expired term policy into a universal life insurance policy. Your agent can explain how conversion credits work if you happen to be in this type of situation.

Does a guaranteed renewable policy mean my rates won’t change?

Unfortunately, if your policy is guaranteed renewable, you’re only guaranteed that you won’t be kicked off of your policy.

Even if your insurance policy is guaranteed renewable, you still may experience rate changes and rate increases.

With Medicare Supplements, you’ll see your rates increase by a few dollars on your birthday each year (Happy Birthday – we know, it stinks).

Sometimes, your agent can find a report showing you how your Medicare Supplement rate will increase over the next few years – if you’re interested in that information, simply contact our team.

With long-term care insurance (LTC insurance), you can bet on the fact that you’ll experience rate increases. If this is already happening to you, and you’re worried that you can no longer afford the policy, please contact us. There are options out there, such as revising your benefits or looking at hybrid options, like a life insurance policy that lets you use your benefits early for long-term care.

With life insurance, you will not experience rate increases (woohoo!). That’s the great part of life insurance – your premium is a sure bet each month.

How do I know if my insurance policy is guaranteed renewable?

If you aren’t sure about your own insurance policy and want to know if it’s guaranteed renewable, simply contact us.

In the senior market insurance space, it’s rare to come across a product that isn’t guaranteed renewable, but it’s still nice to have that peace of mind.

We hope this installment of the Learn the Lingo series was helpful for you. If you have any recommendations for a future article, leave it in the comments below!

✅ Check out the other articles in this series:

1. Learn the Lingo: What does “Guaranteed Issue” mean?
   
2. Learn the Lingo: What Are "Activities of Daily Living?"
   
3. Learn the Lingo: What does “Attained Age” mean?