Insurability Benefits 可保權利益

Guaranteed Insurability Option 保證可保選擇

A Guaranteed Insurability Option is a rider attached to a life policy. It gives the policyholder the right to buy additional life cover on specified option dates without providing fresh evidence of insurability, such as a medical report or health declaration. The insurer assesses the risk only when it issues the rider. If the life insured later falls ill, the insurer cannot use this as a reason to refuse the extra cover or charge an additional premium. The rider protects against the risk of becoming uninsurable, and particularly suits young people whose income is limited now but whose protection needs are likely to grow with family and career.

Option dates are usually specified policy anniversaries or the life insured reaching specified ages, and some policies also allow exercise on life events such as marriage or the birth of a child. Exercising the option is a right, not an obligation, and the sum insured does not increase because of the rider until it is exercised. An opportunity not taken within the stated period generally lapses, but later option dates are usually unaffected. The rider does not allow purchases at any time: extra cover sought outside an option opportunity normally requires fresh underwriting.

The premium for the additional cover is based on the life insured's age when the option is exercised (attained age), not the age at which the original policy was taken out, so added cover generally costs more at older ages. It is not increased because the life insured's health has worsened. The policyholder usually pays a separate premium for the rider, which generally stops after the last option date.

Because no underwriting takes place on exercise, people in poor health are more inclined to use the option, which exposes the insurer to anti-selection. Insurers therefore limit the number of option dates, the amount that can be added each time and the maximum age, and the option generally ends once the life insured reaches a specified age. Actual terms depend on the individual policy. For the exam, keep the distinction clear: a Guaranteed Insurability Option increases the amount of cover, while a conversion option changes existing cover into another type of insurance, such as term to whole life.