What does "policy cancellation" in health insurance mean?

The term "policy cancellation" in health insurance refers to the termination of an insurance policy by either party before its expiration date. This definition encompasses a variety of scenarios in which the coverage is ended before the initially agreed-upon term concludes. This can happen for numerous reasons, including the policyholder's desire to switch insurers or the insurer's decision based on underwriting guidelines or other considerations.

While there are situations where mutual agreements or voluntary withdrawals may occur, they are not typically classified as "cancellation." Mutual agreements suggest a collaborative termination, which may not apply in all cancellation instances. Similarly, while non-payment of premium can lead to cancellation, it is a specific mechanism under which the insurer may terminate the policy, not the broad definition of cancellation itself. Thus, "policy cancellation" accurately encompasses the idea of ending an insurance agreement by either the insurer or the insured prior to the policy's designated end date.