In a guaranteed renewable policy, what can the insurer do?

In a guaranteed renewable policy, the insurer retains the right to raise rates upon policy renewal, which reflects the flexibility in pricing based on risk assessment and market conditions. This means that while the policy cannot be canceled by the insurer as long as premiums are paid, the insurer may adjust the premiums at each renewal period for all insured parties within a certain class, generally in accordance with regulations. This feature allows an insurer to respond to changes in the overall claims experience of their policyholders, although the decision to raise rates must be applied uniformly across a group rather than to an individual policyholder.

The other options do not align with the nature of guaranteed renewable policies. The insurer cannot cancel the policy at will as long as the insured pays premiums, nor can they refuse to pay claims without cause, since the obligation to fulfill the claims is a fundamental aspect of such contracts. Additionally, the insurer does not have the authority to change the insured's age, as age is a determining factor for coverage and premiums; it remains static based on the insured’s date of birth.