Jargon Buster - Definition of Guaranteed Insurability

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Guaranteed Insurability

is a feature that is placed on an insurance policy that allows the policyholder to increase their cover without the need for further underwriting evidence. This is common for protection products such as life insurance, critical illness and income protection.

Many companies limit the increase to a percentage or set amount, for example you couldn't just up your sum assured from 20,000 to 2,000,000, as the risk for the insurer would be far higher. The insurers also usually state that there must be a financial reason for the extra cover, such as a marriage, new / increased mortgage or the birth of a child.

Many companies will not offer guaranteed insurability if you are accepted at non-standard rates, i.e. your premiums have increased due to medical reasons or you have a medical condition excluded from the contract. It should say on your policy documents if Guaranteed Insurability is included or not.

Please note that all definitions are intended for general guidance only. For official and current definitions you should always double check your policy wording.

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