Insurance Cancellation

Timely and full payments of insurance premiums are required so that insurance coverage can continue.  Some insurance policies have grace periods specified within the time period the insured may make late payments without affecting the validity of the insurance coverage.  Continued non-payment of insurance premiums, however, will result to termination of insurance coverage.

Other cases when insurance coverage may be terminated include proven material misrepresentation of the insured party, breach of the insurance plan’s terms aside from those that pertain to premium payments, or there has been a considerable increase in cost of insurance (risks involved in insuring the policy holder).  The latter applies as long as it can be proven that the substantial increase in risks couldn’t have been foreseen by the insurance company in its initial assessment.

It is important to note at this point that insurance coverage cannot be cancelled by the insurance company for arbitrary reasons.  Only the individual policy owner can terminate the policy through non-payment of insurance premiums, misrepresentation, and/or fraud.

Insurance Denials

In terms of application for insurance coverage, insurance companies have the right to refuse renewal of applications in renewable insurance policies.  However, the application or renewal application may not be denied on the basis of race, religion, color, marital status, gender, sexual preference, and moral character.  Health status, risk behaviors, and activities or other factors may affect the decision to approve if these elements have a direct impact on the insurance risks involved.  In most cases, the amount of premiums charged per policy becomes the indication of how risky the insurance company finds an individual.  Substantially different rates, however, need to be supported by evidence and documents in order to be considered as legal.