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Term Life Insurance and the Guaranteed Insurability Rider

By Tes Kurtz on February 11th, 2010

Term insurance is an affordable life policy that provides coverage for a specified period of time, including 10, 20, or 30 years. When the policyholder passes away, the insurance coverage amount is paid to the beneficiary.

If you purchase term insurance early on in life, down the road you may find that your insurance needs grow with life events.

For example, you might purchase term life insurance right after you are married. After a few years, you and your spouse decide to have a child, or perhaps, you receive a promotion at work with a significant raise. Either of these life changes is likely to increase your life insurance needs.

Guaranteed Insurability Rider

A rider is an attachment to an insurance policy that amends the policy's coverage or terms. When you purchase life insurance, you usually have the option to add one or several riders to your policy.

The guaranteed insurability rider alters the parameters of your policy by giving you the right to purchase additional insurance at specific option dates, usually up to age 40. This rider may also allow additional insurance to be purchased at alternate dates, such as after a marriage or the birth or adoption of a child.

Additional Insurance Coverage Regardless of Insurability

Typically, insurability refers to the health of a policyholder. The terms of most guaranteed insurability riders stipulate that you can purchase additional insurance regardless of your insurability. Additional insurance coverage is charged at premium rates based on your attained age. Because your insurability declines with your health, the guaranteed insurability rider can be especially valuable should your health decline as your insurance needs increase.

Convenience of the Guaranteed Insurability Rider

The guaranteed insurability provision can be a convenient way to purchase additional insurance. Oftentimes, when policyholders insurance needs grow, they opt to purchase a new term policy. This rider allows you to meet your growing insurance needs, without having to undergo the underwriting process again.

Compare quotes from multiple insurance companies to choose the best term life insurance policy for you and your family.

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