New Jersey Life and Health State Practice Exam

What is the name of the life insurance rider that allows an individual to purchase insurance as they grow older without regard to insurability?

1. Premium waiver rider

2. Accidental death rider

3. Guaranteed insurability rider

4. Conversion privilege rider

The correct answer is: Guaranteed insurability rider

The guaranteed insurability rider is a provision that allows a policyholder to purchase additional life insurance coverage at specified intervals without having to provide evidence of insurability. This means that as the individual ages or experiences changes in health, they can still increase their life insurance coverage without being subject to standard underwriting processes, which might otherwise consider their medical history and current health status. This rider is particularly beneficial for individuals who anticipate changes in their insurability due to age or health changes, as it provides the opportunity to secure coverage that they might not be eligible for later on. By ensuring that they can purchase additional insurance without having to prove their health status at the time of making a request, it offers a layer of financial protection that aligns with the individual’s growing needs over time. The other options, while relevant in the context of life insurance, serve different purposes, such as waiving premiums in the case of disability or providing benefits specifically related to accidental death, and do not provide the same insurability benefits as the guaranteed insurability rider.