Rhode Island Life Insurance Practice Exam

Which statement about a Guaranteed Insurability Option rider is NOT TRUE?

1. It allows purchase of additional insurance without proof of insurability

2. Evidence of insurability is required when the option is exercised

3. It ensures coverage at predetermined times

4. It can be added to a life policy at the time of application

The correct answer is: Evidence of insurability is required when the option is exercised

The Guaranteed Insurability Option rider is designed to provide policyholders the ability to purchase additional life insurance coverage at specific times without the need to provide evidence of insurability. This feature is beneficial for individuals who may develop health issues over time, as it ensures that they can still obtain coverage despite any changes in their health status. The rider allows for the purchase of additional insurance at designated intervals, such as birthdays or milestones, ensuring that individuals can enhance their coverage as their needs grow. Notably, this option is typically included at the time of the original policy application or can sometimes be added later. The statement that indicates evidence of insurability is required when the option is exercised is not true because one of the primary advantages of the Guaranteed Insurability Option is the elimination of this requirement. This is what distinguishes it from other riders or options that may necessitate health assessments before additional coverage can be purchased.