South Carolina Insurance Practice Exam

All _____ policies must be guaranteed renewable?

1. Whole life

2. Term life

3. Long-term care

4. Universal life

The correct answer is: Long-term care

Long-term care policies are designed to provide coverage for individuals who need assistance with daily activities over an extended time period. To protect policyholders, state regulations typically require that these policies be guaranteed renewable. This means that as long as the policyholder pays their premium on time, the insurer cannot cancel the policy or refuse renewal based on changes in health status or age. This is particularly important in the context of long-term care insurance, where the risk of needing care increases with age and deteriorating health. This requirement ensures that individuals purchasing these policies can maintain their insurance coverage throughout their lifetime, which is crucial given the often high costs associated with long-term care. The guaranteed renewable feature provides peace of mind, allowing policyholders to plan for their future healthcare needs without the risk of losing coverage due to circumstances beyond their control. Other types of policies, such as whole life, term life, and universal life, do not have the same overarching requirement for guaranteed renewability in all cases, as they typically involve different structures and conditions regarding premiums and coverage.