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Question 11 of 13 in Group Or Employer Policies? |
Can an insurance company cancel group coverage? |
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Yes. Group insurance coverage is renewable every 12 months. At the end of each 12 month period, the insurance company can offer:
1. to renew the same coverage for another year at the same price
2. to renew the same coverage at a different (often higher) price
3. modified coverage with the same price
4. modified coverage with new rates, or
5. the insurance company can decline to renew the policy and the customer would then be forced to shop around for a new insurance company.
Normally, rather than canceling the policy, the insurance company would wait for the next policy anniversary and decline to renew it. But there are times when the insurance company might cancel the insurance before the 12-month policy anniversary. This might happen for a variety of reasons, including:
1. Before the policy anniversary the insurance company adopts new rules or new systems which cannot accommodate the customer’s needs. The insurance company then cancels the coverage to free the customer to look for a more appropriate company;
2. The insurance company determines that the insurance was obtained improperly or fraudulently. |
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