Final answer:
The incorrect statement is that evidence of insurability is required when the Guaranteed Insurability Option rider is exercised. This option allows additional coverage without proof of insurability at life events or specific ages. The correct option is C.
Step-by-step explanation:
The statement about a Guaranteed Insurability Option rider that is NOT TRUE is: Evidence of insurability is required when the option is exercised. The Guaranteed Insurability Option allows the policyholder to purchase additional insurance coverage at specified times in the future without providing proof of insurability.
These opportunities typically occur at specific life events such as marriage or the birth of a child, or at predetermined ages specified in the policy.
When this rider is included in a life insurance policy, it ensures that the policyholder can increase their life insurance coverage in response to life-changing events or at specific ages, without the need to undergo medical examinations or provide further evidence of insurability.
As such, it provides a significant advantage by allowing additional coverage to be added easily and without the risk of being denied due to health issues that may develop after the original policy is taken out.