Tony Novak profile picture
  "AskTony" column archive        


Most Popular

AskTony Archive

This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

Content is the opinion of the author and does not represent the position of any other person or entity. Information is from sources believed to be reliable but cannot be guaranteed.

The author is paid for product endorsements and has an ownership or other financial interest in the businesses related to the topics covered.

New questions

Submit consumer finance questions at and health insurance questions at

Sponsored by: Insurance Exchange - your source of valuable information on state and federal health reform benefits.

Core Health Insurance - America's favorite mini-med insurance  with affordable premiums, freedom to choose providers, optional PPO discounts and guaranteed eligibility regardless of medical conditions.

Please support the Web sites that make publication of AskTony services possible.

Renewable health insurance

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: The Celtic Short Term Plan says, "effective 1/1/03, the plan is only available for a one to six month term". But you said in the state of Mississippi the plan can be renewed "for as long as you like". Please clarify if the plan is renewable.

A: The term "renewable" has a specific legal definition with regard to a health insurance policy. It means that the term of coverage under an insurance policy can be extended at the option of the policyholder, for as long as the policyholder wishes, simply by paying the premium. The insurance company cannot cancel the coverage unless permission to do so is granted by the state insurance department for even treatment on every similar insurance policy in the state. The insurance company also can not raise the premium so high on individual policies that policyholders are forced to drop the coverage. By definition, short term medical insurance is not renewable. Every policy has a specified ending date. The longest short term policies can be renewed for 36 months but 6 or 12 months is much more common. The laws of the state of Mississippi (and most other states) allow a policyholder to extend short term medical insurance coverage indefinitely by taking out a number of different consecutive policies. Some, but not all, short term medical insurance policies allow this. When extension of coverage through re-application is not possible then it is necessary to change insurance companies from one short term medical plan to another brand. (Sometimes one insurance company issues health insurance under two or more different brand names). Celtic Insurance allows only 12 months of coverage under short term medical insurance. Other companies at allow unlimited total length of coverage. In general, if you need insurance for a year or less then use a short term policy (or a combination of 2 short term policies). If you know that you need coverage for more than a year, use a long term policy. Renewable health insurance costs about twice as much as otherwise comparable short term health insurance, so only go this route if it is necessary.


More resources: