What are the Different Types of Disability Insurance Policies?

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  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 21 August 2019
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There are three main types of disability insurance policies: non-cancelable, guaranteed-renewable, and conditionally renewable. In a non-cancelable policy, an insurance company cannot cancel it unless a policyholder stops paying his premiums. The guaranteed-renewable policies allow an insurance company to raise an insured person’s premiums upon renewal. The conditionally renewable insurance policy can be renewed but may also be canceled by the insurance company in certain circumstances. An insurance company also has the right to raise the premiums on a conditionally renewable policy.

A non-cancelable policy is among the main types of disability insurance policies. The primary feature of a non-cancelable policy is that an insurance company cannot cancel it, except in the event that the policyholder fails to pay his premiums. With this type of policy, a person can renew his coverage each year without facing an increase in the amount of premium he is required to pay. Likewise, an insurance company cannot reduce the amount of benefits to which a policyholder is entitled.


Also among the types of disability insurance policies are those that are guaranteed renewable. This type of policy gives a policyholder an automatic right to renew his contract. When he renews, he is guaranteed the same benefits granted under the original insurance contract, and the insurance company cannot cancel the policy. Unlike with a non-cancelable policy, a policyholder’s premiums are subject to increase with any renewal. In most cases, however, an insurance company can only increase a policyholder’s premiums if it also increases them for all policyholders that fit in the same category.

Some disability insurance policies are called conditionally renewable. This means an insurance company can cancel a policy in the event that one or more of its conditions are not met. It also means an insurance company can raise a policyholder’s premiums upon renewal.

Disability insurance policies also differ in terms of the types of disability they cover. For example, some cover disabilities that keep a person from working for a relatively short period of time. They are referred to a short-term disability policies, and many of them provide coverage for an average of a month or two up to a couple of years. Others, however, cover disabilities that last for longer periods of time and are referred to as long-term disability policies. Often, these policies pay benefits for two to five years or until the person reaches the recognized retirement age in his jurisdiction.


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My company changed insurance carriers for group insurance. I paid premiums for coverage to my new carrier but now they deny me any claims saying its the previous carriers responsibility. Please explain how a transfer of a companies insurance benefits are affected by the new carrier if there are any consequences at all. When is the new contract considered legal and binding.

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