Illinois Health Insurance Practice Exam

Which provision gives the insurance company the discretion to choose whether or not to renew a policy?

1. Renewability provisions; Noncancelable and Guaranteed renewable

2. Guaranteed Insurability Rider

3. Intoxicants and Narcotics

4. Illegal occupation

The correct answer is: Renewability provisions; Noncancelable and Guaranteed renewable

The correct choice pertaining to the provision that allows an insurance company to have discretion in renewing a policy is the one that specifically addresses renewability provisions. Renewability provisions outline the conditions under which a policy can be renewed or not. In this context, "noncancelable" and "guaranteed renewable" provisions provide some degree of protection for the policyholder, ensuring that as long as premiums are paid, the policy will remain in force and the insurer must renew it. However, situations can exist where the insurance company may retain discretion on whether to renew based on certain terms in these provisions. The other options, while related to specific insurance scenarios, do not pertain to the renewal discretion of a policy. The Guaranteed Insurability Rider relates to the ability to purchase additional coverage without evidence of insurability, and the last two options address specific conditions related to legal and health factors that do not directly affect the renewal authority of the insurer.