Guaranteed insurability option

A guaranteed insurability option (GIO) is a rider that gives the policy owner the right to buy additional life insurance at specified times without proving insurability. It is most often attached to whole life policies bought for children or young adults, because it protects against developing a health condition that would later make coverage expensive or unavailable.

The rider lists option dates, commonly policy anniversaries near certain ages such as 25, 28 and 31, continuing into the early 40s, plus event triggers like marriage, the birth or adoption of a child and sometimes buying a home. On each date you can add coverage up to a set amount, priced at your age then but in the original rate class. Say, hypothetically, a rider allows $50,000 per option: a 28-year-old diagnosed with diabetes at 26 could still add $50,000 without an exam.

Options usually expire if not used within a deadline, often 60 to 90 days after the date or event, and unused options don't accumulate. The rider costs extra premium every year, so it pays off only if you expect to need more coverage later. See guaranteed insurability riders and life insurance riders: which are worth paying for.