Compare quotes instantly.

See Rates

What is the Guaranteed Insurability Rider?

Advertiser Disclaimer

Certain links on this page will refer you to products we might recommend. This creates no additional cost to you, and helps provide us an income so we can continue to bring valuable information to your fingertips. For more information on how we're paid, click our link below.
Full Disclosure

A lot of additional life insurance features and options are available that enable you to tailor your coverage to your individual needs and preferences.

One of the most common is the guaranteed insurability rider.

Commonly shortened to just GIO rider (for guaranteed insurability option), this popular feature lets the policyholder buy additional coverage for their policy with no further underwriting.

The Guaranteed Insurability Rider (GIO Rider)

Depending on the specific life insurance contract you signed, your GIO rider might come included for free with your coverage. Other companies require a small additional payment for the rider to be added onto your policy.

It’s especially valuable for young adults buying life insurance for the very first time.

Because no further underwriting is required, it helps protect you if you develop a serious medical condition in the future; this is because, even if you’re in poor health, you can buy more life insurance as if you were still healthy!

Of course, that’s not all there is to the GIO rider. There are numerous other benefits, but also a few reasons this rider might not be the best idea for you.

We take a detailed look at this popular life insurance option below, starting with a more thorough discussion of what the guaranteed insurability rider is all about.

More Specifics On How It Works

The simple definition of a guaranteed insurability rider is a life insurance feature which allows the policyholder to add additional death benefits to their policy – without any underwriting.

Though each rider is different depending upon the company issuing it, they all have this basic format.

The differences boil down to small nuances. These tend to cover the coverage period, as well as when purchases of additional coverage can be made.

The ability to make this increase in coverage is guaranteed.

You won’t be required to provide any proof regarding changes in your health or lifestyle.

This is particularly beneficial if you develop a serious medical condition during the term of your coverage. It enables you to add an additional death benefit to your policy without jumping through the normal hoops.

Normally, a life insurance company would be unlikely to offer coverage to a patient with a serious medical condition. It’s just too risky for them.

what is the guranteed insurability riderA guaranteed insurability rider guarantees you’ll be able to up your coverage despite your change in medical condition, no matter what.

Of course, this puts a slight amount of risk on the company.

But, because they’ve gone through the underwriting process for your original policy, this risk is relatively small.

The risk is also the reason some companies charge a small additional fee for GIO riders.

Most guaranteed insurability riders are available:

  • at certain ages
  • when married, or
  • when having a new child

Note, you’ll be limited on how much you can increase your coverage amount with the GIO rider. The limits mostly have to do with the health rate class you were assigned during the initial underwriting process.

The maximum tends to be about twice your original death benefit.

Some life insurance providers put a cap at $125,000.

Many people decide to pair the GIO rider with a waiver of premium rider. This enables you to waive premiums if you became disabled.

The waiver actually covers your premiums for you if you’re unable to work. It also enables you to increase your death benefit thanks to the GIO rider.

In this way, these two riders, combined, are extremely powerful if a person were to become sick or injured and unable to work; like getting free increases in life insurance, forever, without cost.

You should definitely consider buying both a guaranteed insurability rider and a waiver of premium rider upfront with your normal life insurance coverage.

How the Guaranteed Insurability Rider Works

Buy the GIO rider and you’ll have the ability to increase your death benefit coverage throughout the terms of your policy.

Most companies restrict these increases to certain points during your life.

As mentioned above, these include set ages as well as important life events like the birth of a child or marriage.

Here’s a quick example:

Janet’s mom bought a life insurance policy on her when she was 18 and heading off to college. It was a simple $50,000 whole life insurance policy, with the guaranteed insurability rider, and she was approved as Preferred.

When Janet was 24, she came down with a rare form of cancer. However, after more than a year of battling, she overcame it and was able to ring the cancer bell.

Now, when she turned 25, it came time for her to utilize her GIO rider.

Even though she had a very rare form of cancer and would have otherwise been denied life insurance from all other carriers, her current insurer let her add an additional $25,000 in coverage, and charged her the Preferred price.

The amount you add at the set dates are flexible, though there are upper and lower limits. You don’t have to add the maximum amount. In fact, you don’t have to add any amount at all.

Most companies have a set limit on these increases. Once you reach a pre-determined age, you can no longer use the guaranteed insurability rider, or they’ll set a limit on how many times you use the rider, in total.

You should also remember there is a cap on increases. The exact value of this cap varies from provider to provider.

What Does The GIO Rider Cost You? (Roughly)

One of the most eye-catching characteristics of the guaranteed insurability rider is that it’s priced at your normal health rating.

This means the company is unable to perform additional underwriting on you at the time that you buy your policy. They are forced to offer you coverage exactly as you originally purchased it, except you’re a few years older.

Even if you don’t have a medical condition, this is important.

Many people gain weight as they age or develop even minor health problems, for example. Your GIO rider covers these by placing you in the same health class as you were when you initially bought coverage.

Adding a guaranteed insurability rider usually does come with a cost, though, even if you don’t use it in future years.

It often increases the overall yearly rate you pay for your insurance policy, although some life insurance companies now include the rider for free with their initial policy.

Though you might pay slightly more for your annual life insurance with the GIO rider, it will be nowhere near the increase you’d have to cover if you went out and bought a new life insurance policy.

Planning for the Unplanned

The benefits of selecting the GIO rider option are hard to understate, and they’re pretty straightforward.

The rider simply allows you to add an additional death benefit without additional underwriting.

This makes a guaranteed insurability rider one of the cheapest ways to increase the value of your coverage without switching policies.

The biggest benefit of the GIO rider is how it’s adapted for your changing needs. A person’s life when they first buy life insurance is often much different than ten or twenty years down the line.

The GIO rider allows you to make policy changes based on new relationships, marriages, mortgages, the birth of children, children’s education, retirement, and more.

Most life insurance companies allow you to make changes with the GIO every several years until you hit the cut off age (most often in your 40’s).

Out of all these benefits, coverage for children is perhaps the most popular. People buy the GIO rider because it allows them to increase their coverage if they have children down the line.

Finding a Guaranteed Insurability Rider

Most life insurance companies now offer a guaranteed insurability option rider for their life insurance policies.

The availability of this additional feature is thanks to the high demand for it among those buying life insurance, especially those of a younger age.

With that said, the rider differs slightly from provider to provider.

That’s why it’s still so important to do your research into each company to make sure the policy, and the additional features they off, adequately meet your needs.

Author:

Avatar

Jason Fisher

Jason Fisher is the founder and CEO of BestLifeRates.org, LLC. and a multi-state licensed life insurance agent who has helped over a million Americans seek out affordable coverage, compare quotes, or get their family and businesses covered.

Related Content