If you spend a lot of time reading my articles on this site you may already be aware that there are a variety of riders you can add to a life insurance policy to suit almost every need and preference you [1
One of the most common life insurance drivers is the guaranteed insurance driver, sometimes just called a GI driver. It is a rider who, even if it costs a small cost, can add a great improvement to your insurance.
The guaranteed insurance driver is just one of many life insurance riders that can be used to customize your insurance.
you buy life insurance through us or another broker or a company, you should always ask which riders are available.
There is a good chance that one or more people give your life insurance an extra level of protection or flexibility that makes it a perfect fit for you and your family.
What is a Guaranteed Insurance Driver?
Despite its low cost, a guaranteed insurance driver is easily one of the most valuable additions that you can attach to a life insurance policy.  Simply put, it allows you to increase the death benefit on your insurance without having to provide any kind of proof of insurance ability.
Proof of insurability is the information collected by a life insurance company before a new insurance is issued. 1965 9003] This may include filling out a health questionnaire, undergoing a medical examination and examining the health industry's health databases to make an assessment of your health.
This is done so that the insurance company can determine what risk level your insurance will be
All this happens when you apply for your original life insurance.
However, if you add a guaranteed insurance driver to the insurance, you can purchase additional amounts of life insurance in the future, without having to provide the proof again.
The insurance company will automatically increase your life insurance coverage regardless of your health at the time of the increase.
For example, let's say you were in excellent health when you took out a $ 500,000 life insurance policy. Ten years later, you decided to buy another $ 250,000 in coverage, but you had a bout of cancer during that time.
If you applied for an extra $ 250,000 as a stand-alone policy from a new company, the premium would be adjusted higher due to the cancer event. And if the section was recent and particularly difficult, the insurance company may even reject your coverage application.
However, if you take the guaranteed insurance policyholder and apply for additional coverage through your original life insurance company, not only can you be approved for additional coverage, but your cancer episode will not be considered when calculating the premium.
How a Guaranteed Insurance Operator Works
A Guaranteed Insurance Driver does not allow the insured to add additional amounts for additional coverage at any time.
Rather, a schedule is set for both the times and the amounts by which additional coverage can be added.
For example, the rider may provide to add additional coverage in the amount of $ 25,000 at specified time frames. It can provide an opportunity to increase the death benefit every five years, or any period specified in the contract.
The rider can also provide an increase in the death benefit based on certain events that occur in your life.
It may, for example, allow for an increase in the benefits of marriage or the birth of a child.
Increases in special events can either be as much as the general increases planned, or they can be higher if the contract allows.  You are also not obliged to accept the higher coverage. If you take out insurance at the age of 27, the guaranteed insurance driver can provide increases at the ages of 30, 35, 40, 45 and 55.
You have the opportunity to take advantage of the increased death benefit, or simply let it pass and do not leave for additional coverage.
Or you will be able to add less than the full amount of the extra benefit.
For example, if the guaranteed insurer provides a death penalty of $ 25,000. benefit, you can choose to accept only $ 15,000 or $ 20,000.
Benefits of a Guaranteed Insurance Driver
Guaranteed increase in your death benefit regardless of your health
As mentioned earlier, the primary benefit of a Guaranteed Insurance Driver is that it does it is possible for you to increase your death benefit without regard to your state of health at the time the increase takes place.
So it not only guarantees the possibility of increasing your death benefit, but it also stipulates that the increases will be based on your health classification at the time you adopted the original policy.
If your health was determined to be excellent at that time, the same health classification will apply when the increase in the death benefit takes place.
The ability to increase your death benefit over time
One of the unfortunate correlations often seen with life insurance is that the time of your life's greatest need – when you have young children and large financial obligations – usually corresponds to limited financial resources.
For example, you may be early in your career and have very little extra space in your budget for life insurance coverage.
The advantage of a guaranteed insurance driver is that you will be able to increase your death benefit incrementally as provided by
You can start with a death benefit of $ 250,000 at age 25, with the ability to increase the benefit by $ 25,000 every fifth year.
This means that your death benefit can be increased to $ 275,000 at age 30, $ 300,000 at age 35 and up to $ 400,000 at age 55.
The increased death benefit, as well as the higher premiums it will cost, will be easier to manage as your financial situation will have improved over the years.
Disadvantages of Guaranteed Insurance Rider
There are two potential disadvantages, although both are small compared to the benefits offered by the rider.
The first is cost. Your insurance will cost a little more if you add a guaranteed insurance rider to the plan.
However, a guaranteed insurance driver is one of the cheaper riders you can add a policy to.
Limited opportunity to implement
19659033] The more significant disadvantage is that both the increases and the possibility of implementing them are limited.
For example, if you take out a $ 250,000 policy at age 25 and the guaranteed insurance driver gives a $ 25,000 increase at $ 30, it may be completely inadequate if your need for life insurance at that age is $ 500,000. .
Although you may welcome the possibility of increasing the death benefit on your original insurance, you may still need to take out a brand new insurance policy to get the additional coverage you need.
It will not be a big problem if your state of health has not changed significantly since you adopted the original policy. But if you have developed a health condition, such as diabetes or high blood pressure, you will pay more for the new policy.
How much does a Guaranteed Insurance Rider add to Premium
No doubt adding a Guaranteed Insurance Driver to your policy will increase the cost of premiums.
This should be expected as the life insurance company takes the risk of offering guaranteed increases in your death benefit, regardless of your state of health at the time these increases take place.
Essentially, the company agrees to waive health requirements that would normally be set when adding additional coverage. A higher premium is used to compensate for that risk.
But it's pretty cheap. It will only increase the cost of your monthly premium premium policy by a few dollars, making it one of the best dedicated insurance dollars you will ever spend.
When to add a guaranteed insurance driver to your insurance  In the beginning. This is the only time the driver can be added to your policy. Once the insurance has entered into force, it is no longer possible to add a guaranteed insurance driver to the plan.
That's why it's so extremely important to discuss the different riders available with a life insurance policy at the time of application.  The vast majority must be added when the policy first enters into force. After that, the option to make additions will vary between rare and non-existent.
How to add a guaranteed insurance rider
Again, a guaranteed insurance driver – or almost any rider at all – must be added at the time you apply for your life insurance.
Be sure to discuss all insurance options with your life insurance agent or broker in advance.
Brokers are generally the best choice when shopping for life insurance. This is because we work with many different life insurance companies and are not "caught" for a single company as individual agents.
A captured agent can only include the insurance and riders offered by one company in your policy. As a broker, we can adapt your policy and find the company that best suits the options and riders you want to include.
Also keep in mind that we as brokers specialize in working with applicants who have unique situations and health conditions. Most of the cheap life insurance ads you see on the web and on TV are aimed at the young and very healthy. If you are outside this target group, your life insurance needs will be best served by life insurance brokers, such as us.
For example, if you work in a dangerous profession or if you have some form of significant health condition or health. event in your history, you need a much more practical method of finding a life insurance policy. That's exactly what we do; give you a customized adjustment of the best policy for your conditions and budget.
And best of all, you pay nothing extra for our services.
* While doing our utmost to keep our site up to date, be aware that "current" information on this site, such as quotation estimates, or relevant company information, may only be accurate from the last day of editing. Huntley Wealth & Insurance Services and its representatives do not provide legal or tax advice. Contact your own legal or tax advisor.