Long-term care (LTC) insurance policies can have different terms and conditions. One of the key features of an LTC insurance policy is whether it is "guaranteed renewable and non-cancellable."
• Guaranteed renewable means that the insurance company cannot cancel the policy as long as the policyholder pays the premiums on time. The insurance company cannot increase the premium for an individual policyholder, but they can increase the premium for all policyholders in a particular state or group.
• Non-cancellable means that the policyholder has the right to renew the policy every year and the insurance company cannot change the terms or conditions of the policy or increase the premium.
Here's an example of how this feature works:
Let's say John has an LTC insurance policy that is guaranteed renewable and non-cancellable. John has been paying the premiums on time for several years. One day, John develops a medical condition that requires long-term care. He submits a claim to the insurance company, which approves the claim and begins paying the daily benefits.
Even if John's medical condition worsens or his health declines, the insurance company cannot cancel his policy or increase his premium. As long as John continues to pay the premiums on time, he can keep the policy and receive the benefits outlined in the policy.
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