Guaranteed renewability

Dear Mr. Tan,
I am told that if I make a claim, the insurance company can refuse to renew my medical insurance. Is this correct?

REPLY
Some medical insurance plan operate on a yearly basis. The insurance company has the legal the right to refuse renewal or to charge a higher premium rate if the policyholder is in bad health.

The Medishield (and similar plans provided by the insurance companies) have the guaranteed renewability feature. It operates as follows:

1. The insurance company is obliged to renew the medical insurance until a certain specified age (say 85 years) or for a lifetime.

2. The premium rate is the same as applied to all people in the same age group or category. The insurance company cannot charge a higher premium rate for an insured person who has made a claim.

This is called "guaranteed renewability".