Mr. Wong purchased medical insurance in 2016 and had been regularly paying the premium on time since then. In 2017, during policy renewal, his insurance company notified him that the premium of his medical insurance plan would increase along with enhanced coverage.

Mr. Wong did not wish to pay the increased premium as he felt that there was no need for coverage enhancement. Given that the plan’s brochure stated “guaranteed renewal”, Mr. Wong requested to renew his plan according to the same terms – coverage and premium – when he first took out the policy. However, the insurance company declined his request.

What does “guaranteed renewal” mean with regard to medical insurance?

Very often, “guaranteed renewal” sounds like a renewal promise without any condition to the client. In fact, the meaning of “guaranteed renewal” is that it provides a renewal offer regardless of the client’s health condition, but, at the same time, the insurance company has the right to adjust the premium and terms and conditions of the plan.

In reality, given that medical expenses rise with inflation, the maximum benefits payable for medical insurance should be increased accordingly to ensure customers can enjoy adequate coverage.

Furthermore, depending on the insurance plan, premiums may also change when clients enter the next age band.

Hence, “guaranteed renewal” does not represent a promise that premiums or terms will remains unchanged during renewal.

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