Under the guaranteed renewable provision, when can an insurer increase policy premiums?

The guaranteed renewable provision allows policyholders to renew their insurance policy each year without the insurer having to demonstrate insurability, providing a significant level of security to the insured. However, it also allows the insurer to adjust premiums but only under specific circumstances. In this case, the correct answer indicates that an insurer can increase policy premiums at the policy anniversary date.

This means that once the policy has been in force for a full year, the insurer has the right to review and adjust premiums, ensuring that any changes reflect current risk assessments or underwriting guidelines. This timing is critical because it aligns with the renewal process, allowing both the client and the insurer to prepare for the financial commitments in the upcoming policy period.

In contrast, increasing premiums at any time during the policy term would not align with the concept of guaranteed renewal, which is designed to protect the insured from sudden changes in cost. Likewise, the other options that suggest increases only upon request from the insured or when specific conditions arise do not reflect the annual renewal structure established by the guaranteed renewable provision. Thus, the premium increase is limited to the anniversary date to maintain fairness and predictability for policyholders.