What is a characteristic of a guaranteed renewable policy regarding premiums?

A guaranteed renewable policy is designed to provide the policyholder with the right to renew the policy at the end of each term, regardless of changes in health status. However, while the policy guarantees renewal, it does not guarantee that the premiums will remain the same over the life of the policy. Instead, premiums can increase based on the insurer’s overall rate-making schedule, which is influenced by factors such as the claims experience of the insured group or rising costs in healthcare. This means that although the policy is guaranteed renewable, the premiums might increase at each renewal period, reflecting changes in risk or market conditions.

In contrast, policies might have fixed premiums, but guaranteed renewable contracts allow insurers to adjust premiums at renewal time, under certain conditions. Therefore, the correct choice accurately reflects that premiums can indeed increase for guaranteed renewable policies, aligning with the structure of these types of insurance products.