How to Insure Your Income: Eliminating Non-Cancellable Policies

Eliminating non-cancellable policies is another industry solution to reform problems in the disability income market. A person who buys a non-cancellable disability income policy at age 35 is guaranteed no cancellation -- and no increase in premium -- at least until age 65.

By reducing or eliminating this type of renewability from the low-risk group, an insurance company can raise premiums as necessary to help cover claims.

To protect consumers, insurance companies might emphasize guaranteed renewable policies, instead of non-cancellable ones. Guaranteed renewability assures a person that the policy cannot be can-celled -- though premiums may increase.