Guaranteed purchase option
A guaranteed purchase option refers to a benefit that can be added to a life insurance policy permitting the insured to purchase additional amounts of life insurance at specified times in the coming future without any requirement of evidence of insurability.
A guaranteed purchase option is a feature under which policyholders can buy coverage at designated life events or future dates without proving that they are in good health. This feature is also called the insurability option. The use of this option is specifically attractive when insurance is issued on a child’s life.
This option does not need evidence of insurability to buy more life insurance at particular times during a lifetime.
The guaranteed purchase option indicates a way or means of reducing cost, instilled in your health insurability, and some coverage. But every company does not offer this option and again the provisions may differ significantly.
With more usage of these options and long-term care hybrid plans, long-term care insurance may give considerable benefits for care when required.
Use of the term in Sentence:
- The professor is discussing the guaranteed purchase option in the insurance policy and risk management class.
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