South Carolina Insurance Practice Exam

Which life insurance rider allows coverage without the necessity of proof of insurability?

1. Accidental death rider

2. Children's term rider

3. Waiver of premium rider

4. Guaranteed insurability rider

The correct answer is: Guaranteed insurability rider

The guaranteed insurability rider allows an insured individual to increase their coverage without the need to provide proof of insurability or undergo medical underwriting at specified times, such as birthdays or life events like marriage or the birth of a child. This is particularly advantageous as it enables individuals to secure additional coverage when they might not otherwise qualify due to changes in their health. The rider is designed to protect policyholders in case their health status deteriorates over time. It provides peace of mind knowing that they can still increase their life insurance coverage without dealing with the potential financial consequences of becoming uninsurable. Thus, this rider is valuable for those who anticipate future needs for higher coverage but wish to avoid the barriers often associated with obtaining that coverage if their health declines. In contrast, the accidental death rider primarily provides an additional benefit in case of death resulting specifically from an accident, but it doesn't relate to insurability proof. The children's term rider offers coverage for a policyholder's children but is also not tied to insurability requirements. The waiver of premium rider ensures that premiums are waived if the insured becomes disabled, but again, it does not allow for additional coverage without proof of insurability.