I started Insurance Blog by Chris™ because I have a passion for insurance. Here at the blog, our job is to educate and inform people about the best insurance for them. Since then, we have grown into national brands with a large team of researchers helping people understand all forms of insurance.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Nov 19, 2021

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If you spend much time reading my articles on this website, you may already be aware that there is a multitude of riders you can add to a life insurance policy to fit just about any needs and preferences you have.

That means that while the base policy types—whether term life, whole life, or some other investment type plan—are standard, riders can be used to turn each into a custom financial product.

One of the most common life insurance riders is the guaranteed insurability rider, sometimes referred to simply as a GI rider. It’s a rider that, while it comes at a small cost, can add a major enhancement to your policy.

The guaranteed insurability rider is just one of many life insurance riders that can be used to customize your policy.

Whether you’re purchasing life insurance through us or another broker or company, you should always ask what riders are available.

Chances are, one or more will give your life insurance policy the extra level of protection or flexibility that will make it a perfect fit for you and your family.

What is a Guaranteed Insurability Rider?

Despite its low cost, a guaranteed insurability rider is easily one of the most valuable add-ons you can attach to a life insurance policy.

Simply put, it enables you to increase the death benefit on your policy without the need to provide any kind of proof of insurability.

Proof of insurability is the information collected by a life insurance company before issuing a new policy.

It can include having you complete a health questionnaire, undergoing a medical exam, and investigating insurance industry health databases to make an evaluation of your health.

This is done so the insurance company can determine the level of risk your policy will present to the company.

All this takes place at the time you apply for your initial life insurance policy.

But, if you add a guaranteed insurability rider to the policy, you’ll be able to purchase additional amounts of life insurance in the future, without needing to furnish that proof again.

The insurance company will automatically increase your life insurance coverage regardless of your health at the time the increase is instituted.

For example, let’s say you were in excellent health at the time you took a life insurance policy for $500,000. Ten years later, you decide to purchase an additional $250,000 in coverage, but you had a bout of cancer during that time.

If you were applying for the extra $250,000 as a standalone policy from a new company, the premium would be adjusted higher because of the cancer event. And, if the episode was recent and particularly severe, the insurance company might even decline your application for the coverage.

But, if you take the guaranteed insurability rider and apply for additional coverage through your original life insurance company, you not only might be approved for additional coverage, but your cancer episode will not be considered in calculating the premium.

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How a Guaranteed Insurability Rider Works

A guaranteed insurability rider does not give the insured the option to add any amount of additional coverage at any time.

Rather, a schedule is set for both the times and the amounts by which additional coverage can be added.

For example, the rider may provide for adding additional coverage in the amount of $25,000 at specified time frames. It may provide for the ability to increase the death benefit every five years, or whatever period is specified in the contract.

The rider may also provide for increasing the death benefit based on certain events that occur in your life.

For example, it may allow for the increase of the benefits upon marriage or the birth of a child.

Special event increases can be either the same amount as the general increases scheduled, or they may be higher if the contract permits.

You are not obligated to accept the higher coverage either. If you take a policy at age 27, the guaranteed insurability rider may provide for increases at ages 30, 35, 40, 45, and 55.

You’ll have the option to take advantage of the increased death benefit, or simply let it pass and not add additional coverage.

Or, you’ll be able to add less than the full amount of the additional benefit.

For example, if the guaranteed insurability rider provides for a $25,000 increase in the death benefit, you can choose to accept only $15,000 or $20,000.

Benefits of Guaranteed Insurability Rider

Guaranteed Increase in Your Death Benefit Regardless of Your Health

As mentioned earlier, the primary benefit of a guaranteed insurability rider is that it enables you to increase your death benefit without regard to your health condition at the time the increase takes place.

So, not only does it guarantee the ability to increase your death benefit, but it also stipulates that the increases will be based on your health rating at the time you took the original policy.

If your health was determined to be excellent at that time, the same health rating will apply when the increase in the death benefit takes place.

The Ability to Increase Your Death Benefit Over Time

One of the unfortunate correlations very frequently seen with life insurance is that the time of greatest need in your life—when you have young children and large financial obligations—usually corresponds with limited financial resources.

For example, you may be early in your career and have very little extra room in your budget for life insurance coverage.

The advantage of a guaranteed insurability rider is that you will be able to increase your death benefit incrementally as provided by the rider contract.

You may start out with a $250,000 death benefit at age 25, with the ability to increase the benefit by $25,000 every five years.

That means your death benefit can be increased to $275,000 at age 30, $300,000 at age 35, and up to $400,000 by age 55.

The increased death benefit, as well as the higher premiums it will cost, will be easier to handle because your financial situation will have improved over the years.

Disadvantages of Guaranteed Insurability Rider

There are two potential disadvantages, though both are minor in comparison to the benefits the rider offers.

Cost

The first is cost. Your policy will cost a little bit more if you add a guaranteed insurability rider to the plan.

However, a guaranteed insurability rider is one of the less expensive riders you can add to a policy.

Limited Opportunity to Implement

The more significant disadvantage is that both the increases and the opportunity to implement them are limited.

For example, if you take a policy for $250,000 at age 25, and the guaranteed insurability rider provides for a $25,000 increase at 30, that may be totally inadequate if your need for life insurance at that age is $500,000.

While you may welcome the opportunity to increase the death benefit on your original policy, you may still need to take an entirely new policy to get the additional coverage you need.

That will not be a major problem if your health condition hasn’t changed significantly since taking the original policy. But, if you developed a health condition, like diabetes or hypertension, you will pay more for the new policy.

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How Much Does a Guaranteed Insurability Rider Add to the Premium

Unquestionably, adding a guaranteed insurability rider to your policy will increase the premium cost.

This should be expected, since the life insurance company’s taking the risk of offering guaranteed increases in your death benefit, regardless of the state of your health at the time those increases take place.

Essentially, the company is agreeing to waive health requirements that normally would be imposed any time you add additional coverage. A higher premium is used to offset that risk.

But, it is fairly inexpensive. It will only increase the cost of your monthly premium over the base policy by a few dollars, making it some of the best, dedicated insurance dollars you’ll ever spend.

 

When to Add a Guaranteed Insurability Rider to Your Policy

In the beginning. That’s the only time the rider can be added to your policy. Once the policy is in force, it’s no longer possible to add a guaranteed insurability rider to the plan.

This is why it’s so vitally important to discuss the various riders available with a life insurance policy at the time of application.

The vast majority must be added when the policy is first put in force. After that, the option to make additions will range between rare and nonexistent.

How to Add a Guaranteed Insurability Rider

Once again, a guaranteed insurability rider—or just about any rider at all—will need to be added at the time you apply for your life insurance policy.

Be sure to discuss all policy options with your life insurance agent or broker upfront.

Brokers are generally your best choice when shopping for life insurance. That’s because we work with many different life insurance companies, and are not “captive” to any single company the way individual agents are.

A captive agent can only include in your policy the provisions and riders offered by that one company. As brokers, we can customize your policy and find the company that will best accommodate the options and riders you want to include.

Also be aware that as brokers, we specialize in working with applicants who have unique situations and health conditions. Most of the low-cost life insurance ads you see on the web and on TV are aimed at the young and very healthy. If you’re outside this target group, your life insurance needs will best be served by life insurance brokers, like us.

For example, if you work in a hazardous occupation, or you have any kind of significant health condition or health event in your history, you’ll need a much more hands-on approach to finding a life insurance policy. That’s exactly what we do; provide you with a custom fit of the best policy for your circumstances and budget.

And, best of all, you’ll pay nothing extra for our services.