South Carolina Life and Health Practice Exam

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Study for the South Carolina Life and Health Exam. Engage with flashcards and multiple choice questions; each question is outlined with hints and explanations. Prepare for your certification journey!

Practice this question and more.

Which type of Disability Income plans prohibits the insurer from ever changing premium rates?

Cancellable
Adjustable
Noncancellable
Guaranteed renewable

The correct answer is: Noncancellable

Noncancellable disability income plans are designed to provide a significant level of security for the policyholder. With this type of plan, the insurer agrees not to change the premium rates at any time during the life of the policy, as long as the policyholder continues to pay the premiums. This guarantees predictability in terms of cost and protects policyholders from potential future rate increases. Such an arrangement is particularly beneficial for individuals who want to ensure that they maintain coverage and can budget for their premiums without fear of escalation, regardless of changes in health status or market conditions. In contrast, cancellable plans allow insurers to change premium rates or even terminate the policy with proper notice. Adjustable plans may allow the insurer to modify the premium but under specific circumstances. Guaranteed renewable plans ensure that the insurer must renew the policy, but they can still increase the premium based on specific factors. Therefore, the noncancellable option stands out as the only one that guarantees unchanging premium rates for the duration of the contract.