What term describes a policy that can be canceled in the middle of the term with notice?

• A. Noncancelable
• B. Cancelable
• C. Renewable
• D. Convertible

Answer: (B)

The idea being tested is policy cancellability—the insurer’s right to end coverage before the term ends with proper notice. A cancelable policy is one where the insurer can cancel the contract at any time during the term as long as proper notice is given. This differs from noncancelable, which means the insurer cannot cancel the policy under any circumstances. Renewable describes whether the policy can be renewed at the end of the term (often with possible premium changes), not whether it can be canceled midterm. Convertible deals with converting a term policy to a permanent one, which again is unrelated to midterm cancellation. So, describing a policy that can be canceled in the middle of the term with notice fits the concept of cancelable.