What does it mean when a health insurance policy is described as Cancellable?

A health insurance policy described as cancellable means that it can be cancelled at any time by either the insurer or the insured. This characteristic provides flexibility, allowing both parties to end the contract under specific conditions. For instance, the insurer might choose to cancel the policy for non-payment of premiums or changes in health risks, while the insured may cancel it if they find better coverage or no longer need the insurance.

This type of policy is distinct from those that might have automatic renewals, restrictions on cancellation, or transferability limitations. Such distinctions clarify the nature of the coverage and the rights of both the insurer and the insured within the insurance agreement. Understanding the implications of a cancellable policy is crucial, as it can impact long-term planning and financial protection strategies for health care.