New Jersey Life Producer Practice Exam

A policy featuring a Guaranteed Insurability rider allows the insured to purchase what?

1. Additional Years of Coverage

2. Life Annuity

3. Long-Term Care Insurance

4. Extra Premiums

The correct answer is: Life Annuity

A policy featuring a Guaranteed Insurability rider allows the insured to purchase additional amounts of life insurance coverage at specified intervals without having to provide evidence of insurability. This means that the individual can secure additional coverage regardless of changes in their health status, which can occur over time. This rider is often advantageous for individuals who want to ensure that they can increase their life insurance coverage as their needs change, such as after marriage, the birth of a child, or other significant life events. The Guaranteed Insurability rider specifically addresses circumstances where the insured may wish to increase their policy limits, typically aligning with their evolving financial responsibilities. This feature is valuable for those planning for future needs and seeking flexibility in their insurance solutions. Understanding this allows assured purchasing power over additional life insurance as circumstances warrant, hence the guaranteed aspect ensures that no health qualifications are needed at the time of the additional purchase.