When purchasing a life insurance policy, you may be asked if you'd like to include one or more riders. Life insurance riders are add-ons that can be used to expand your policy's coverage. A guaranteed insurability rider, also known as a guaranteed purchase option rider, allows you to increase your policy's death benefit without being subject to a second medical exam. Adding this type of rider could make sense if you think your life insurance needs may change in the future, though it could also mean paying higher premiums.

What Is a Guaranteed Insurability Rider?

Standard life insurance policies are designed to pay a specific death benefit to one or more individuals you name as beneficiaries. Life insurance riders allow you to enhance or expand your insurance policy's coverage.

These add-ons can cover a number of scenarios, including:

• Accelerated death benefit riders to pay for end-of-life care before you pass away
• Long-term care insurance riders to help pay for nursing home expenses
• Disability income riders, which can be used to replace lost income if you become completely disabled
• Children's riders to extend life insurance coverage to minor children

Guaranteed insurability or guaranteed purchase option riders let you increase the amount of your life insurance policy's death benefit at a future date, without submitting to a medical exam.  When you first buy life insurance, the insurer often requires a medical exam. This exam usually involves blood and urine samples, a body mass index measurement, and a check of your blood pressure. The results of the exam, along with your answers to a medical and lifestyle questionnaire, are used to determine your life insurance rate class. This rate class influences how much you pay for life insurance. The better your overall health, the lower your premiums are likely to be. A guaranteed insurability rider allows you to avoid further medical exams. If you were to buy a brand-new life insurance policy, on the other hand, that could trigger higher premium rates if you're significantly older or your health status has changed since you first got coverage.

Guaranteed insurability shouldn't be confused with guaranteed issue life insurance. That's a type of life insurance policy that requires no medical exam but comes with a waiting period before it will pay a death benefit.

How a Guaranteed Insurability Rider Works

Guaranteed insurability riders can be attached to term life or permanent life insurance policies, though they may be less beneficial with a term life policy. That's because term life insurance is designed to cover you for a set time period only. If you only want to be covered from age 35 to 55 to pay off your mortgage or other debts, for example, then you may not need to think about getting more coverage long-term. 

With permanent life insurance, your coverage remains in place for life, as long as you keep paying the premiums, which could make it desirable to increase your death benefit as you age.   Insurance companies can establish their own terms for how guaranteed insurability works in conjunction with a life insurance policy. But generally, you're allowed to purchase additional life insurance on what's known as an option date. These option dates can be specific dates on the calendar or may be tied to life events, such as getting married or the birth of a child. There may be a set window before or after an option date when you're allowed to increase your coverage. When option dates are predetermined, they can fall on your policy purchase anniversary date and be spread out over three or five year periods. This means you'd be able to plan ahead if you want to exercise the option to buy more insurance.  The cost of adding a guaranteed insurability rider to your policy will also vary from one insurer to another, though it may not exceed a few extra dollars every month.  

Who Needs a Guaranteed Insurability Rider?

Whether you should add a guaranteed purchase option rider to your life insurance policy can depend on the type of coverage, your age, your life situation, and your overall health.  For instance, if you're young and healthy with no plans to marry or have children, then a term life insurance policy may suit your needs better than a permanent one. You could keep a policy in place to pay off any debts you may leave behind and cover funeral and burial expenses. In that scenario, taking on the added cost of guaranteed insurability might not make sense. 

Or, if you do have dependents, then you may be able to purchase a large-enough term policy to cover their needs for decades to come. Term insurance is significantly cheaper than whole life or other permanent insurance.

On the other hand, you may want to consider a guaranteed purchase option rider if:

• You're interested in maintaining permanent insurance coverage for life
• You have one or more medical conditions that may get worse as you age
• Your family's medical history makes you predisposed to developing serious illnesses or chronic health conditions
• You're the primary breadwinner for your family, and you want to ensure that any death benefit you leave behind would suffice for their needs
• You have a child with a chronic health condition that you'd like to purchase a permanent insurance policy for 

It can be helpful to talk with an insurance agent about the finer points of guaranteed insurability so you fully understand what it may cost, how much you can increase your coverage by, and whether there are any limitations on its use. For example, your insurance company may only allow you to increase your policy's death benefit up to a certain age. Once you reach the age cutoff, you wouldn't be able to get more insurance without purchasing a new policy.

The Bottom Line

A guaranteed insurability rider can be used to increase your life insurance coverage without the necessity of a second medical exam. However, it will add to the cost of your policy and may not be necessary if you already have sufficient insurance.