Which statement is true about guaranteed renewable policies?

• A. The policy can be canceled at any time.
• B. Premiums cannot ever increase.
• C. The policy cannot be canceled, but premiums may be increased at renewal.
• D. The policy cannot be canceled and premiums cannot increase.

Answer: (C)

Guaranteed renewable means the insurer cannot cancel the coverage at renewal as long as premiums are paid, but the insurer can raise premiums when the policy is renewed. This gives the policyholder ongoing protection and access to coverage, while recognizing that risk and costs can change over time. Premium increases are typically applied at renewal and may affect the whole class of insureds rather than just one person, rather than staying completely fixed for the life of the policy. So the statement that fits best is that the policy cannot be canceled, but premiums may be increased at renewal.