By definition, “insurance” is a contract or policy that provides financial protection against loss. Whether it’s loss of property, a job, health, even a particular skill or unique characteristic (Betty Grable’s legs, Bruce Springsteen’s voice, etc.) or your life, insurance provides compensation for loss. And one factor that plays a pivotal role in the selection and purchase of insurance is the one you cannot prevent or control: change.
Change happens. Things change. Some are predictable, like the aging process; some are not, like illness or accidents. So in the insurance business, there is a feature known as an “insurance policy rider.” An insurance “rider” is any addition to your basic insurance policy that allows you to add-on benefits that were not included in your original policy.
There are several popular riders that you might want to consider, when selecting your coverage. And, perhaps, the most useful of these riders is the Guaranteed Insurability Rider. This rider allows you to purchase additional benefits/coverage, in the future, without a new medical examination or, otherwise, proving your current level of insurability. This guarantee is guaranteed, even if your health has changed.
Who Needs a Guaranteed Insurability Rider
While different insurance companies have their own particular guidelines and regulations, the Guaranteed Insurability Rider will usually set specific dates, when you can use your option to purchase your additional insurance. For example you might be able to add-on at age 30, 35 and 40 or every three years between 25 and 40. But usually, there is an age where the opportunity will end, often at age 40.
Additionally, the maximum amount of coverage you may purchase might also be limited on each specific option date, according to your age. But that’s in keeping with the fact that all life insurance premiums are, primarily, determined by the age and health, of the policy-holder, at the time of purchase. Here you have an opportunity to increase your coverage without providing proof of your insurability.
This rider is, especially, helpful if you are in a high-risk group for a specific disease, due to family history or if you know, or believe, that your health may change in the future. It is also a very worthwhile rider to have in case of an accident or any life-changing event that would, otherwise, affect your ability to increase your existing coverage.
When you talk to your Paradigm Life agent about your insurance needs, ask for more information or to include the Guaranteed Insurability Rider in your policy quote. If it’s ever needed, you’ll be very grateful that you did.