Life & Health Insurance Practice Exam 2026 – Your All-in-One Guide to Exam Success!

A non-cancelable policy is a type of insurance that guarantees the policyholder that their premium rates will not increase for the duration of the contract, regardless of changes in market conditions or the insured's age. This stability is a key feature of non-cancelable policies, providing security to the policyholder.

Consequently, the correct answer indicates that premiums for a non-cancelable policy cannot be increased beyond the original amount specified in the policy. This means that the insurer is legally bound to maintain the premium at the agreed level, which helps in financial planning for policyholders as they can be assured that their costs will remain predictable over the life of the policy.

In contrast, possibilities such as increases based on market conditions or age are characteristics of other types of policies, not non-cancelable ones. The assurance that premiums will remain stable is one of the main reasons individuals may choose a non-cancelable policy.