Which of the following statements about a Guaranteed Renewable Health Insurance policy is correct?

A Guaranteed Renewable Health Insurance policy ensures that the policyholder has the right to renew their health insurance coverage for as long as they continue to pay premiums, without the insurer having the ability to cancel the policy due to health status changes. While premium rates can rise with each renewal, they typically do not decrease; a common characteristic of health insurance is that premiums tend to increase as the insured ages or as health care costs rise.

This policy guarantees renewability, meaning the insurer cannot refuse to renew the policy based on the health of the insured, but it does allow for premium increases, often based on the overall pool of insured individuals or other factors set by the insurer. Thus, it is accurate to state that premiums normally increase at renewal. This reflects the underlying principle of risk management that insurance companies engage in, ensuring they can cover claims while remaining financially viable.