If an insurer issues a policy with a guaranteed issue provision, what does that mean?

• A. The insured must undergo medical underwriting
• B. No medical exam is required for eligibility
• C. Premium rates cannot change
• D. Policy is non-renewable

Answer: (B)

Guaranteed issue means the insurer will issue the policy regardless of the applicant’s health, so no medical underwriting is used to determine eligibility. You meet basic criteria like age and residency, and you pay the premium. This makes the product accessible to people who might have health issues that would normally be scrutinized in underwriting. However, these policies often come with higher premiums and may have benefit limitations or waiting periods.

That’s why the statement about no medical exam being required for eligibility best captures the idea. The other options don’t fit because underwriting is not required under guaranteed issue, premium rates can still be affected by risk and time (they aren’t guaranteed forever), and guaranteed issue plans aren’t necessarily non-renewable.