What Is A Guaranteed Insurability Option?

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What Does The Guaranteed Insurability Option Mean?

No one knows what the future holds, so the Life Insurance or Income Protection you have now, might not be fit for purpose after certain life events.

This is where Guaranteed Insurability comes in. It will allow you to increase your benefit amount without the need for further medical evidence if you go through life events such as:

• Having children
• Marriage / Civil Partnership
• Divorce / Dissolving of Civil Partnership
• Pay rise
• Become a parent
• Increase in mortgage / rent.

Most if not all insurers will give you a limit of up to 3 months after the event has taken place with which to request a change in your insurance cover.

Is It Worth It To Look For A Policy With A Guaranteed Insurability Rider?

If your circumstances change in the future you may need to increase your insurance benefit to cover all of your responsibilities.

If you decide to have children or move home, your benefit might not cover all of the expenses that pile up over the years.

Having a guaranteed insurability option on your insurance policy makes it easier to adjust your cover when you need it. This is because you won’t have to go through the hassle of facing another stage of underwriting.

If you had to apply for a brand new policy with a higher benefit, you’d likely face higher premiums. This would be due to the extra cover and your increase in age.

Not only this, if your health has taken a downward turn, applying for a new policy to get more cover could mean that you are refused a policy altogether. This is due to the fact you would have to go through new medical underwriting.

Most UK Life Insurance providers and Income Protection Providers offer Guaranteed Insurability. With this in mind it is something to look out for when taking out a policy. It can provide peace of mind knowing that if your circumstances do change, you have the ability to amend your cover with no further underwriting.

The Limitations Of Your Options

Some insurers will also put some limitations on your guaranteed insurability benefit. This includes limits on:

• Frequency – how frequently you can use the guaranteed insurability option
• Time Period – limitations on how long you will be able to use your guaranteed insurability option
• Age Restrictions – some providers may ask you to submit new medical information once you reach certain ages.

You also might not have access to this benefit if you accept an insurance policy with non-standard terms. This is usually more common with Income Protection than Life Insurance. However, you should be aware of this and make sure that you fully understand the terms before you apply.

Need Independent Expert Help?

If you need help putting a Life Insurance or Income Protection policy in place, our expert team are on hand to help.

We can help to cut through all the jargon and ensure you get the right cover for you and your circumstances. Just pop us a call on [dynamic-number] or email help@drewberry.co.uk.