Georgia Life and Health Insurance Practice Exam

The term "nonrenewal" in the context of insurance policies refers to the termination of a policy by the insurer on the renewal anniversary. This means that the insurer has decided not to continue offering coverage for that policy once it expires. Nonrenewal can occur for various reasons, such as changes in the risk profile of the insured, lack of payment, or other underwriting criteria that the insurer may have.

Understanding nonrenewal is crucial for policyholders because it signifies that they will need to seek out new coverage if they wish to maintain their insurance protection. It is also important to note that nonrenewal is distinct from cancellation; while cancellation can occur mid-term for various reasons, nonrenewal specifically relates to the decision made by the insurer not to renew the policy when it comes due for renewal.