Final answer:
A Guaranteed Insurability Rider allows a policyholder to buy additional insurance without a medical exam. This is vital for maintaining coverage despite changes in health since the initial insurance policy.
Step-by-step explanation:
The rider that permits the policy owner to purchase additional amounts of insurance without taking a physical examination is the Guaranteed insurability rider. This rider allows the policy owner to increase the coverage amount of their policy at specific intervals or life events, such as marriage or birth of a child, without providing evidence of insurability. It provides flexibility and ensures that the policy owner can obtain additional insurance as their needs change.
A rider that permits the policy owner to purchase additional amounts of insurance without taking a physical examination is best described as a Guaranteed Insurability Rider. This type of rider is important as it allows the policyholder to increase their insurance coverage at certain times or life events without medical underwriting, which could otherwise hinder the ability to obtain more insurance due to health conditions that have developed since the original policy was issued. Insurance methods provide significant protection against financial loss, with policyholders making premium payments to an insurance company that, in turn, offers compensation for covered events leading to financial damage.