Final answer:
A Guaranteed Insurability Rider allows the insured to purchase additional coverage without proof of insurability. It is typically available in life insurance policies and ensures that the insured can increase their coverage if needed.
Step-by-step explanation:
A Guaranteed Insurability Rider is an added feature to an insurance policy that allows the insured to purchase additional coverage at a later date without having to provide evidence of insurability, such as proof of good health. This rider is typically available in life insurance policies and ensures that the insured has the option to increase their coverage in the future if their needs change.
For example, let's say a person purchases a life insurance policy with a Guaranteed Insurability Rider at age 30. Later on, when they are 40 and have started a family, they decide that they need more coverage to protect their loved ones. With the Guaranteed Insurability Rider, they can buy additional coverage without undergoing a new medical examination or answering health questions.
It's important to note that there are usually limitations on when and how often the insured can exercise this option. The terms and conditions of the rider may vary depending on the insurance company and policy.