Disability insurance policy renewability provisions govern the insurer’s ability to cancel coverage or increase its premium. The most insured protection is provided by coverage that is noncancellable and guaranteed renewable. Disability definitions may vary greatly from insurer to insurer and may consider the insured totally disabled when unable to do his or her own job or may require that the insured be unable to perform the duties of any job.
The principal disability insurance exclusions and limitations refer to pre-existing conditions, acts of war, and the insured’s service in the armed forces. These provisions may limit the insurer’s liability for the insured’s disability or may eliminate it altogether.
The correct answer to each question is shown in green. Click any question to review the relevant section of the study text.
Review Questions
That the insurer will not increase the premium during the specified period
That the insurer will not refuse to renew the policy during the specified period
✓Both a and b
Neither a nor b
Noncancellable & Guaranteed Renewable
Conditionally Renewable
✓Automatically Renewable
Guaranteed Renewable
✓If the condition was disclosed in the application for the policy and was not excluded
If the agent has accepted the pre-existing condition risk
After the policy has been in force for one year
The insurance company specifically excluded the condition
✓elimination period
benefit period
rehabilitation period
probationary period
2 years
5 years
✓age 65
lifetime
© 2007–2026 Wall Street Instructors, Inc. All rights reserved.