Texas Life Agent Practice Exam

Which rider ensures you can purchase additional insurance coverage, at specified ages, regardless of health?

1. Waiver of premium rider

2. Guaranteed insurability rider

3. Accidental death rider

4. Term rider

The correct answer is: Guaranteed insurability rider

The guaranteed insurability rider is designed to allow policyholders to purchase additional insurance coverage at specified intervals, typically at certain ages or major life events, without the need to provide evidence of insurability or undergo health assessments at those times. This rider is particularly valuable because it addresses the potential for changes in health that could affect the ability to acquire insurance in the future. For example, if an individual has health issues that develop after their initial policy is underwritten, the guaranteed insurability rider ensures that they can still add coverage as they age or as their circumstances change, thus maintaining financial security for themselves or their beneficiaries. This feature is particularly appealing for young adults considering future family expansion or increasing financial responsibilities over time. In contrast, other riders listed do not offer the same benefit. The waiver of premium rider typically allows the policyholder to skip premium payments in the event of disability, but does not provide additional coverage. The accidental death rider adds a benefit if the insured dies as a result of an accident but doesn’t allow for increased coverage irrespective of health status. Lastly, the term rider is often used to provide additional coverage for a specified period but does not typically include guaranteed purchase options or considerations for changes in health.