What is a defining characteristic of a 'non-cancellable' disability insurance policy?

Question: What is a defining characteristic of a 'non-cancellable' disability insurance policy?

Answer options:

• The insurer can increase premiums for an entire class of policyholders. ✅ The insurer cannot change the premium rates or the benefit amount.
• The insurer can cancel the policy at any time with 30 days' notice.
• The policy automatically converts to a long-term care policy at age 65.

Correct answer: The insurer cannot change the premium rates or the benefit amount.

Explanation: In a non-cancellable disability policy, the insurer cannot change the premiums or the terms of the contract as long as premiums are paid on time. This provides the most security to the policyholder. 'Guaranteed renewable' allows for premium increases for entire classes of policyholders, whereas 'non-cancellable' fixes the price.