Rhode Island Life Insurance Practice Exam

Which of the following options allows a policyholder to increase their life insurance coverage without having to provide additional proof of insurability?

1. Conversion Option

2. Rider Option

3. Substitution Clause

4. Supplemental Coverage

The correct answer is: Conversion Option

The conversion option is a feature that permits policyholders to convert their existing life insurance policy into another type, typically a permanent policy, without the need to provide additional proof of insurability. This means that if a policyholder has developed health issues since their original application, they still have the opportunity to secure a higher coverage amount without being subjected to medical underwriting or evidence of insurability requirements. This option is particularly beneficial for individuals who may have concerns about their health affecting their insurability in the future, as it provides a safeguard to increase coverage based on their previous insurability status. In contrast, the other options mentioned do not specifically grant a policyholder the ability to increase coverage without additional underwriting. For instance, riders may offer additional benefits but usually require evidence of insurability when they are added to a policy. Similarly, a substitution clause and supplemental coverage do not inherently provide a mechanism for increasing coverage without further proof of insurability.