What is the difference between guaranteed renewable and non-guaranteed renewable policies?

Understanding renewability is crucial when purchasing life insurance in Australia, as it affects your long-term protection security. Guaranteed renewable policies mean the insurer must renew your policy each year (or term period) regardless of your health changes, age, or claims history. You have the right to continue coverage until the expiry age specified in your policy (often age 99 for retail policies), and the insurer cannot cancel your policy or change the terms (except for premium increases based on age or CPI) as long as you pay premiums. Guaranteed renewability provides certainty and peace of mind, even if you develop serious medical conditions or make claims. Most retail life insurance policies in Australia are guaranteed renewable. Non-guaranteed renewable policies allow the insurer to refuse renewal at the end of each policy term based on your health changes, claims experience, or the insurer's decision to exit certain market segments or risk categories. These policies are less common in Australia's retail life insurance market but more common in group insurance through superannuation funds. Super fund life insurance is typically non-guaranteed renewable because super funds can change insurers, modify coverage terms, or exit certain arrangements based on the group contract rather than individual policies. This creates risks: if you develop cancer or heart disease while covered through super, your fund might change insurers and the new insurer might not cover you, or coverage might be reduced. This is a significant disadvantage of super life insurance compared to retail policies. When comparing policies, always check the PDS for renewability terms. Guaranteed renewable retail policies generally provide superior long-term protection, especially as you age and health naturally declines. While super insurance is cheaper initially, the lack of guaranteed renewability can leave you without coverage precisely when you need it most if your health deteriorates.