When you initially applied for your life insurance policy, you needed to answer a series of questions related to your health. Depending on which benefit you wanted, you were most likely required to undergo a medical exam before receiving your policy.

Of course, your age, health, and amount of coverage you wanted play considerable roles in your current insurability, but what about if you need more coverage in the future?

This is where a guaranteed insurability rider comes into play. This brief article will go over what this guaranteed insurability rider does for you and who you can reach out to for more information!

What Is a Life Insurance Rider?

Before we get into what a guaranteed insurability rider is, let’s first define what a “rider” even is. Riders on an insurance policy are additional benefits that you can buy and add to your life insurance policy. Depending on the type of rider you choose, it can add different kinds of protections so long as you meet the conditions set out by the rider. 

You will need to pay extra when you purchase a rider for your policy, but the additional premium added to your existing policy is relatively low. These additional rates are lower because of the little underwriting needed to determine the costs. 

How the Guaranteed Insurability Rider Works

A guaranteed insurability rider is available on specific life insurance policies. This rider allows you to purchase additional insurance at particular dates, and it is subject to minimums and maximums.

One of the most significant benefits of this rider is that you do not have to go through a medical exam or answer any health-related questions. In a more simple way to explain it, you have the opportunity to purchase more life insurance without having to prove how insurable you are. 

A guaranteed insurability rider, also known as a GI rider, works by allowing you to purchase additional coverage every three or five years. You can buy this additional coverage on the anniversary date of your policy. Most life insurance policies allow you to purchase additional coverage when you go through significant life events such as adopting a child, birthing a child, or marriage. 

Make sure to review your policy so you know when to exercise your right to add these additional benefits. Most policies allow you to exercise this right within thirty to ninety days of a specified date. If you have any confusion, you can always reach out to your insurer to learn more about these dates. 

Who Needs the Guaranteed Insurability Rider?

If you are an adequately healthy individual without any family history of health issues or chronic illnesses, you most likely do not need a guaranteed insurability rider. If you have a dependent or a child with a chronic illness, you may want to consider purchasing a life insurance policy with the GI rider. This will help lock your child into preferential premiums while they are young. 

Scenarios where you may benefit from a GI rider:

  • A medical condition that may worsen as you age
  • Family history of an illness that may affect you before you turn 45

If you also want a permanent policy and plan to increase your coverage in the near or far future, you may want to consider this rider. This rider is also good if you want to increase your death benefit without going through a medical exam. 

Do I Need the Guaranteed Insurability Rider?

If you are under the age of 40 and you have reason to believe that you will have health challenges in the future, you should consider this rider. This rider will help ensure that you have the benefit you need in the future while keeping your premiums relatively low early on. 

As mentioned earlier, you can add this rider to specific life insurance policies. The GI rider is more commonly seen with whole life insurance policies. Whole life insurance policies are more expensive on average, but if you or your children have medical conditions that may worsen significantly, you should consider this rider. 

Disadvantages of GI Riders

Although the guaranteed insurability rider is an excellent addition to your life insurance policy, you may want to consider a few of its disadvantages. For example, GI riders are generally exclusive to whole life insurance policies, which, as mentioned earlier, are a bit more expensive than other policies such as term life policies. 

Another disadvantage is that the final option period for this rider ends at the age of 40. So, if you are already 40 or older, you won’t be able to obtain this rider. 

Alternatives to the Guaranteed Insurability Rider

There is no need to fret if you find yourself not wanting to purchase a GI rider. If you anticipate needing more life insurance in the future, you still have other options. 

Cost of Living Rider

To help offset inflation, this cost of living rider gives you the opportunity to purchase additional insurance each year! The amount of insurance available to you to buy depends on the cost of living index. The rates for this rider tend to be on the lower side, and you generally won’t need to submit a new medical exam. 

Term Rider

This rider allows you to add term coverage on top of your permanent life insurance policy. It is important to note that this additional coverage is not a permanent option. This additional coverage expires after a certain amount of time. Ensure to go over the timeline with your insurer for further help. 

Purchase Your GI Rider Today!

Unfortunately, people generally do not get healthier as they age, especially if they have a chronic illness or a family history of illness. To combat this inevitable situation, it is best to add on a guaranteed insurability rider to ensure that you have the additional coverage you need. If you are ready to see your options and have more questions about this rider, contact us now!

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