What is Guaranteed Insurability Rider?

Thang Truong
Thang Truong
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One of the areas that can seem the most convoluted about life insurance is all the riders. These are additional terms you add on to a policy that can affect how that policy operates. One example is a guaranteed insurability rider. In short, this rider allows you to purchase additional coverage in the future. Below we’ll look more in-depth at what it is, when you’d want it and where you can find it.

What is a Guaranteed Insurability Rider?

A guaranteed insurability rider allows people to buy more life insurance coverage with no underwriting. This allows you to increase your benefits without any additional proof of insurability. What that means is that you can increase your death benefit and the company can’t deny you for additional coverage because of an existing medical condition. According to Protective, you don’t even have to answer health questions or do a physical exam under this rider.   

It’s also important to know that, even through the rider, you may only be able to add life insurance coverage at certain ages or during major life events like marriage or the birth of a child. According to Protective, it’s common to see this rider allow you to add coverage every three or five years. You often have a window of 30 or 90 days during which you can add coverage.  

Typically, you may also find that there is a cap on how much life insurance coverage you can add. It’s common to only find this rider through permanent life insurance types.  

You might also find that the rider only extends to a certain age, depending on the company. For instance, Nationwide’s guaranteed insurability rider only extends to the insured being 40 years of age or younger.

Many different life insurers have these rider, like Nationwide, Protective and Assurity. 

>>MORE: What Is Universal Life Insurance? And Its Pros and Cons?

Who is a Guaranteed Insurability Rider For?

According to the financial planning company, Mass Mutual, this plan is most commonly used when parents or grandparents buy starter life insurance policies for their children. The rider gives the children the ability to increase coverage if they start families of their own. 

If you are also concerned about your health down the road, since age doesn’t usually bring vast improvements for health, you might want to consider this rider. It’s especially important if you have a family history with medical issues.

This rider is also good for anyone at the age when they think they might get married or have kids, since the rider itself often kicks in during major life events like these.

This rider is also a great option if you have a limited budget and you want to ensure that you have access to affordable life insurance coverage down the line.

>>MORE: What Are Life Insurance Surrender Charges?

Pros and Cons

To help you assess this rider at a glance, below we’ve provided several pros and cons:

Pros of a guaranteed insurability rider:

  • You can add additional life insurance coverage at a later date
  • No medical exam or questions when you do add coverage under this rider
  • Rider kicks in certain years or at life events like marriage or birth of a child

Cons of a guaranteed insurability rider:

  • Some plans only go up to certain ages, like age 40 
  • Can mean an additional monthly cost on top of the regular premium
  • May have a cap on how much coverage you can add

>>MORE: The Pros and Cons of Variable Universal Life Insurance

Cost of Guaranteed Insurability Rider

These riders can come as a free benefit with the contract or come at a small additional charge. A guaranteed insurability rider is typically a small additional fee on top of the premium. You can typically get this rider added for a few dollars per month.  

>>MORE: How Much Does Whole Life Insurance Cost?

Final Thoughts

If you want the option to add coverage to your life insurance policy at a later date, then you may want to consider a guaranteed insurability rider. These allow you to add coverage during certain years or at life events like marriage or the birth of a child. You don’t have to undergo medical exams or questions, also known as proving your insurability. These are best for people who expect to grow their families, have concerns about their health down the road or just want increased flexibility on their life insurance plan.

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Thang Truong
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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