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Guaranteed Insurability Rider Guide

Researcher & Writer
April 09, 2020

There are many life insurance riders you can choose from to add additional layers of protection onto your life insurance policy. Among the very best life insurance riders for young adults is the Guaranteed Insurability rider, AKA the Guaranteed Insurability Benefit option, AKA Policy Purchase Option rider, and any other names the top life insurance companies give it.

What Is the Guaranteed Insurability Option Rider?

Now the guaranteed insurability option rider is offered by many different companies, with certain companies adding certain nuances to the features. This guide is an overview and is not specific to any company or rider.

Now before we jump in, let's define what the Guaranteed Insurability rider is.

The guaranteed insurability option rider is a rider for life insurance that allows the owner to purchase additional coverage periodically at certain attained ages or upon certain special occasions such as marriage and the birth of a child. The choice to use the option is guaranteed and the coverage is added with no evidence of insurability required, meaning no health exam or medical questions.

As a rider you can attach to a life insurance policy, the Guaranteed Insurability option allows you to increase the coverage amount on specific dates or to choose an entirely new policy based on your original life insurance health rate class. You will be limited on how much you can get, but typically the maximum amount will be twice your original death benefit, up to $125,000.

What’s more, the change can be made without underwriting and without concern for health or any other factors. Since it’s guaranteed, your health won’t play a role and this is why many are choosing this rider each and every year.

Essentially, the Guaranteed Insurability rider allows you to lock-in your details at the point of setting up the policy. Once the policy is in place and the rider is installed, your health at that moment in time will be used for decisions regarding extensions and additions in the future. Therefore, you "future-proof" your policy and allow for changes in the future when your needs change (without having to worry about health concerns).

Option Periods

Additions can only be made to the policy on specific dates and this is important to remember. While each insurance provider differs on a significant amount of the details, this is one area that seems generalized and you need to know these dates if you plan to make changes as you age. Below, we’ve created a table to show the option periods and we should note your changes needs to be made within 30 days of the anniversary date on the specific years shown.

Issue Age

Option Period

Total # of Option Dates


25, 28, 31, 34, 37, 40, 43, 46



28, 31, 34, 37, 40, 43, 46



31, 34, 37, 40, 43, 46



34, 37, 40, 43, 46



37, 40, 43, 46



40, 43, 46



43, 46


Therefore, if you opened the policy at the age of 23 years, you’ll have eight different option periods while somebody who opened their policy at 35 would only have four option periods. On the option period year, the time you can make changes starts 30 days before the anniversary date and ends 30 days after.

In addition to this, you could also have ‘Substitute Option Periods’ available and these allow you to make changes for big life events. With most policies, you’ll have 91 days to make changes after the adoption of a child, marriage, or the birth of a child. Of course, the Substitute Option Period will only take effect when you have this rider in place so it’s appearance on your policy underpins everything.

Furthermore, we should note that you need to make changes carefully during this period. If you make changes during a Substitute Option Period, you lose the right to make more changes in the next Regular Option Period.

Let’s say you’re 29 years of age and you’re planning on making changes to your policy at 31; if you have a child before then and make changes during the Substitute Option Period, you won’t be able to make additions again until age 34 because you lose the right to the next one, since you chose the alternate substitute. Therefore, we recommend making all changes you’ll need for the next four or five years during a Substitute Option Period.

Why Choose the Guaranteed Insurability Rider?

Nowadays, insurance companies realize more than ever that your needs are ever-changing. As you enter a relationship, get married, open a mortgage, have children, send children off to college, and retire, your needs are likely to change and the Guaranteed Insurability rider guarantees you can make adjustments every few years. Right up to the age of 46 years, you can make adjustments to your policy and this is ideal for all those major changes.

Covering children

One reason a young adult would consider the guaranteed insurability option would be to make certain you have the appropriate coverage in place for all of life's occasions. The advantage of the guaranteed insurability option rider is you can elect to add additional coverage upon each child's birth or adoption, which provides peace of mind knowing if you die your family will be financially provided for.

Coverage for Children and Young Adults

If you want life insurance for your children, the guaranteed insurability option rider is a must have. Life is full of uncertainties and safeguarding the future insurability of your kids with permanent life insurance that includes the guaranteed insurability option rider is a great way to prepare them for a solid foundation of financial success.

Furthermore, there’s another advantage to buying life insurance for children and it comes with the cash value accumulation component. Once in place, the policy will start building a cash value. The cash value can be used later in life for a number of pursuits, including paying for their first home, paying for college, or investing.

And cash value life insurance has specific tax advantages over the more promoted 529 plan. One of the main benefits is that cash value in the policy is not considered an asset on a FAFSA application, which is not the case with a 529 Plan. Further, the cash value can be used for anything, whereas with a 529 Plan, the money is restricted to specific uses.

Electing an Increase

If you want to elect an increase in the face amount of your policy, you’ll need to complete a written application. With the Guaranteed Insurability rider in place, you won’t have to prove your insurability because you’ve already been accepted by the company and the rider negates the need. As you might expect, there will be an appropriate increase to your premiums.

Once the application has been completed, it will normally need to be sent to the administrative office of the company along with the first premium before the option period comes to an end. If the application is being sent during a Substitute Option Period, the insurer will also need proof of the adoption, marriage, or birth before they can allow the increase. If all the requirements have been met, the changes will take place from the beginning of the next month.

Size of Increase

Of course, we haven't yet addressed the nature of the increase and most companies will set a maximum of doubling a policy, with a limit of $100,000 - $125,000 depending on the life insurance company. However, there are also other stipulations to which you should pay attention to and this normally includes a Minimum Option Amount. Typically, the Minimum Option Amount will be at least $10,000.

If you happen to give birth to or adopt more than one child, each insurer will have the option to boost the maximum increase within a Substitute Option Period. Normally, the Rider Option Amount will be multiplied by the number of children. However, the children will have to be part of the same adoption/pregnancy. Once again, insurers and policymakers need to remain protected and this is why they will never exceed three times the Rider Option Amount.

Adjusting the Rider Option Amount

With Guaranteed Insurability, there should be an option to increase the Rider Option Amount which will allow you to adjust everything discussed in the previous section. This time, you will need to prove insurability along with the written application because this particular adjustment isn't included in the original rider terms and conditions.

In terms of timing, the application must be sent within the 60-day window we’ve discussed previously (within 30 days before and after the anniversary date). Normally, the insurance provider will have their own specifications for this but the general rule is a limit of $100,000. If you need any details regarding amounts or how to increase the Rider Option Amount, your insurance company should provide you with the details and a finance professional can tell you the pros and cons of doing so.

On some occasions, you might even want to reduce the Rider Option Amount and this is also possible with a written request. With a Minimum Option Amount within the policy specifications, you can learn more about your policy and how it can be adjusted.

Additional Information Regarding Guaranteed Insurability

At this point, you should be more comfortable with the topic of Guaranteed Insurability, the terms, the benefits, and how you can protect your children's future insurability by combining it with other riders. To finish, we’re going to take you through some additional information you should know about the rider and how it will affect your policy.

Premium - First, your premiums will increase with the rider attached and this is because you’re receiving additional benefits. Just as we see with other riders, you pay for the privilege of having it on your policy even if you don’t use it for the duration it’s activated. Ultimately, the amount you pay will depend on your circumstances and the policy you have open.

Contestability - With all policies and riders, insurance companies will have a two-year contestability period which means they retain the right to open an investigation and question the details you’ve provided. If you lie or omit an important piece of information, the insurer is extremely likely to find out about it during this period which is why it pays to tell the truth.

Although it depends on the company and the severity of the issue, you could be forced to pay more in premiums for this or you could even have the rider taken away from your policy so it’s important to be honest at all times during the application process. Typically, the two-year period will begin on the day the rider is issued and this will be stated in the policy specifications. Once the rider has been in place for over two years, the company cannot contest the validity of the rider.

Suicide - If the insured commits suicide within the two-year suicide exclusion period, the death benefit will not be paid to the beneficiary. Instead, there is normally a full refund of the premiums.

In addition to this, the insurance company will calculate the premiums both before and after the increase in coverage so the right amount is returned. However, if the suicide occurs within two years of the rider being added, there will be no separate refund for the rider itself.

For the two-year suicide period, this occurs with any face amount under the rider and it normally begins on the day the rider is issued. If there was a change in the Rider Option Amount, this refreshes the countdown or starts a new one; for the most part, the two-year period will exist after all major changes.

Terminating the Rider

The Guaranteed Insurability rider will continue until your policy anniversary when you are age 46, at which point is terminates automatically. Other occasions where the rider ends automatically would include decreasing the face amount or terminating the policy.

If you no longer need the rider or feel as though it isn't beneficial to your policy or situation any longer, you can write to the company to have it removed. From the next monthly charge date, the rider won’t exist and you’ll lose the benefits that come with it.

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