Guaranteed Insurability Options: Peace of Mind as Your Life Evolves
Life is constantly changing. You might get married, have children, take out a larger mortgage, or receive a promotion at work. These milestones often mean you need more financial protection, but what happens if your health has changed since you took out your Life or Critical Illness Cover? This is where Guaranteed Insurability Options (GIO’s) can be a real game-changer.
What are Guaranteed Insurability Options?
A Guaranteed Insurability Option (GIO) is a benefit often included with protection policies when you take them out. In simple terms, it gives you the ability to increase your cover amount at specific points in the future, without needing to undergo any further medical underwriting. You won’t need to answer any more health questions or undergo a medical examination when you activate this option (although, you may need to provide evidence of your life event). This provides invaluable peace of mind, knowing you can increase your cover even if your health has changed.
How Do GIOs Work?
GIOs are designed to be triggered by certain life events, such as:
Getting Married or Entering a Civil Partnership: A significant milestone often requiring increased financial protection for you and your partner.
Having a Child: Bringing a new life into the world often means extra costs and financial responsibilities.
Increasing Your Mortgage: If you move home, buy a new property, or re-mortgage to free up equity.
Receiving a Significant Pay Rise: Your financial obligations may change if you experience a significant increase in your salary and may require you to increase protection.
When these events occur, you have a window of opportunity (usually a few months) to increase your cover amount, up to a certain limit, without providing additional medical information.
What are the Restrictions?
While GIOs offer significant flexibility, there are always some conditions and limitations:
Election Periods: You will usually only have a window of opportunity (often within three months) to increase your cover after a specific life event has occurred.
Maximum Increase: There is usually a cap on the amount by which you can increase your cover. This amount is usually set when you first take out the policy.
Inclusion: Many customers may have the GIO benefit excluded when their policy is taken out. Insurance companies will often exclude the benefit due to things like a pre-existing medical condition or high BMI.
Age Limits: GIOs may not be available after a certain age.
Qualifying Events: The GIO must be triggered by a specific “qualifying event,” such as those listed above. Other “life events” may not apply.
Policy Type Restrictions: GIO’s may not be available on all types of policies, so it is best to enquire with your adviser or direct with the insurer to know the terms of your policy.
Secure Your Family’s Financial Future Today
Guaranteed Insurability Options are a great feature not talked about enough in the protection industry. With many clients replacing their existing policies (due to a change in circumstances), with more expensive arrangements, when utilising their GIO’s would have been the smartest (and more cost-effective) move.
If you would like more information on Life Insurance, or GIO’s, speak with one of our experts today.
