Guaranteed insurability


Also found in: Acronyms.

Guaranteed insurability

A life and health insurance policy feature that enables the insured to add coverage at future times and at fixed and agreed-upon rates regardless of health conditions.

Guaranteed Insurability

A provision in some life and health insurance contracts stating that the insurance contract will be renewed at the end of its term at a certain, stated premium without regard for the policyholder's health when the contract expires. One generally must pay extra for guaranteed insurability. It should not be confused with a guaranteed insurance contract. See also: Pre-Existing Condition.
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Do not confuse the guaranteed insurability option with the Cost-Of-Living Adjustment (COLA) provision that most companies also offer in their AL policies.
(b) Guaranteed insurability that provides options to purchase substantial additional coverage at specific times without evidence of insurability, subject only to showing that the insured's current income supports the increased coverage.
In their most common use, additional purchase options (APOs) or guaranteed insurability options (GIOs) are attached to permanent policies on younger insureds.
Other features include the Waiver of Premium facility ('OwnOccupation' definition is preferred),non-smoker rates and the guaranteed insurability options for such events as marriage, childbirth,moving house etc.
This can be accomplished by using the cash value or policy loans to buy as much term insurance as possible, perhaps through guaranteed insurability and conversion clauses thoughtfully included in the policy, then augmenting the coverage further by making additional transfers of cash to the trust to pay premiums.
Some important considerations include a guaranteed insurability option (usually only a small premium increase); stability, reputation and rating of the company; and how the cash value of your policy performs.
The notion is known in insurance parlance as "guaranteed insurability." Guaranteed insurability means that no matter what happens to your children, no matter what your child's health condition is at age 21 and again at age 28, the guaranteed insurability option allows an increase in benefits without any physical examination.
For example, a Supplemental Coverage Rider can give clients the flexibility to add a lower cost layer of death benefit protection while a Guaranteed Insurability Rider gives insureds the ability to increase death benefit coverage in the future.
* Guaranteed Insurability: The insured retains the right to purchase additional benefits at a future date without providing more or new evidence of insurability.
Even the time-honored guaranteed insurability option in life insurance is a change-it-up kind of feature.
The items that are of special importance when evaluating AL policies are the adjustment provisions and the commonly offered guaranteed insurability options.
This can be accomplished with either a guaranteed insurability option or lengthy (20- to 30-year) policy terms.
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