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According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT A. Unearned premiums are retained by the insurance company (Answer) B. The insurer must provide the insured a written notice of the cancellation C. Claims incurred before cancellation must be honored D. An insurance company may cancel the policy at any time
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT A. Unearned premiums are retained by the insurance company (Answer) B. The insurer must provide the insured a written notice of the cancellation C. Claims incurred before cancellation must be honored D. An insurance company may cancel the policy at any time
Final answer:The statement 'Unearned premiums are retained by the insurance company' is incorrect. When an insurance policy is cancelled, the insurer must return unearned premiums, provide a written notice of cancellation, and honor any claims incurred before the cancellation. Moreover, insurers can cancel a policy at any time, provided they meet legal requirements.Explanation:According to the rights of renewability rider for cancellable policies, most statements about cancellation of an individual insurance policy are accurate. However, the option A stating that'Unearned premiums are retained by the insurance company'is not correct. By law, if an insurance policy is cancelled, the insurance company is obligated to return the unearned portion of the paid premium. This ties into a fundamental law of insurance where an individual's payments into insurance cover the individual's claims, the running costs of the company and remaining profits. It would not be equitable for the insurance company to keep the portion of the paid premium for which the insured has not received coverage (unearned premiums). In addition, the insurance company is required to provide (B) a written notice of the cancellation, and (C) they must honor claims incurred before the cancellation. Finally, (D) it's true that an insurance company may cancel the policy at any time, assuming it follows the proper rules and regulations defined by the law.Learn more about Insurance Policy Cancellation here:brainly.com/question/34197242#SPJ11...