Life & Health Insurance Exam (National Portion)Life InsuranceMedium
A life insurance policy includes a provision that allows the policyowner to purchase additional insurance at specified future dates or events (e.g., marriage, birth of a child) without having to prove insurability. What is this provision called?
- AReinstatement Provision
- BGuaranteed Insurability Rider
- CAutomatic Premium Loan Provision
- DWaiver of Premium Rider
Show answer & explanationAnswer & explanation
Correct answer: B. Guaranteed Insurability Rider
The Guaranteed Insurability Rider allows the policyowner to increase the face amount of their policy at certain intervals or life events without undergoing further medical underwriting.
Why the other options are wrong
- A. Reinstatement allows a lapsed policy to be put back in force.
- C. Automatic Premium Loan uses cash value to pay overdue premiums.
- D. Waiver of Premium waives premiums during disability.
Guaranteed Insurability Rider
A life insurance rider that allows the policyowner to purchase additional coverage at specific times or life events without providing evidence of insurability.
- Allows future coverage increases
- No medical exam required at the time of increase
- Available at specified ages or life events
Memory trick: Some riders help your policy grow or adapt without new hurdles.