Life insurance companies offer a variety of riders or simply policy add-ons to customize your insurance coverage. Some riders come at no additional cost and are built into the policy, while others have an additional cost.
Guaranteed Insurability Rider
The Guaranteed Insurability (GI) rider is also called “additional purchase option.” This rider allows you to buy additional life insurance coverage (or death benefit) at specific intervals without an exam or going through the underwriting process. Some companies allow you to add more coverage during milestones such as childbirth, marriage, or after the policy has been in-force for a set number of years.
This rider is only available on permanent life insurance policies like whole life, and not on term life insurance.
How much more life insurance can you buy?
The amount that can be added is pre-defined by the insurance company and is subject to your age. If you increase coverage later, you will have to pay more in premiums, but your health won’t be a factor since you locked in your health when the policy was issued.
When can you buy more life insurance?
Typically, you need to exercise the right within 30 or 90 days of the specified date, so it’s important to review your policy and know your option dates.
Who should consider buying the GI rider?
If you’re concerned your health might significantly negatively change in the future or if you have a family history of serious medical issues that develop later in life you should consider it. If you want to ensure that you have the option for buying additional coverage later, then it’s also something to consider.
How else can you buy more life insurance?
Another way to get more coverage later is to buy another life insurance policy. The downfall is you’ll be older which means it will be more expensive and if your health has negatively changed it will be more expensive, or even worse you could be uninsurable. The best time to buy life insurance is today before you get any older and your health declines.
The Bottom Line
The GI rider allows you to buy more life insurance in the future while locking in your health insurability today. Talk to your independent life insurance agent to find out details and if it’s right for you.