Which statement about a guaranteed renewable health insurance policy is correct?

A guaranteed renewable health insurance policy allows the policyholder to renew the policy for a specific period without re-evaluating health status. While the insurer cannot refuse to renew the policy, they do have the authority to increase premiums upon renewal. This increase is typically based on the overall health of the pool of insured individuals or broader considerations like inflation and rising healthcare costs, rather than an individual’s claim history.

Thus, stating that premiums often increase at the time of renewal reflects a common characteristic of guaranteed renewable policies. Policyholders should be prepared for potential hikes in their premiums when they renew their coverage, even though they cannot be denied renewal based on health changes. This aspect is crucial for proper financial planning and understanding the long-term viability of such policies.

The other statements do not align with the nature of guaranteed renewable policies. For example, premiums do not decrease upon renewal, remain constant throughout the policy, or become non-renewable after the first term, which distinguishes guaranteed renewable policies from other types of health insurance arrangements.