Question

What is FALSE regarding guaranteed insurability rider?

1) It provides the policyholder with the ability to purchase additional insurance coverage at specific times in the future without the need for a medical exam
2) It is a common rider found in life insurance policies
3) It guarantees that the policyholder will always be able to renew their policy
4) It is only available to individuals under a certain age

Answer 1

The guaranteed insurability rider allows for the purchase of additional insurance coverage without a medical exam and is common in life insurance. The false statement is that it guarantees policy renewal.

Step-by-step explanation:

The Guaranteed Insurability Rider indeed permits policyholders to acquire additional insurance coverage at predetermined intervals without undergoing a medical examination, commonly associated with life insurance policies. However, it does not assure the perpetual renewal of the existing policy. Rather, its primary function is to facilitate the purchase of additional coverage, allowing policyholders to adapt their insurance to changing life circumstances.

It's important to note that this rider often comes with age restrictions, typically making it available only to individuals under a certain age. As a result, the fourth statement is accurate—the availability of the Guaranteed Insurability Rider is often limited to younger policyholders, reinforcing its significance for those who may anticipate the need for increased coverage as their life circumstances evolve over time.