A medicare supplement policy can be cancelled by the insurer for

• A. Nonrenewal
• B. Nonpayment
• C. Misstatement
• D. Late premium

Answer: (B)

Medicare supplement policies are designed to be guaranteed renewable and generally cannot be canceled for health, age, or illness. The insurer’s cancellation rights are limited, and the most direct way to cancel midterm is for nonpayment of the premium. If the premium isn’t paid, and the grace period passes, the policy lapses and coverage ends.

Nonrenewal is simply the insurer choosing not to renew at the end of the policy term, not a midterm cancellation. Misstatement on the application can affect the contract’s validity or claims, but it isn’t the standard reason a policy is canceled for nonpayment. A late premium is usually dealt with within the grace period, and the policy can remain in force if the payment is made before that period ends.

So, the reason that best fits “canceled by the insurer” is nonpayment of the premium.