A question I’m often asked is
“Can I get more life insurance in the future if I need it?”
My answer is
“Yes, but you’ll have to answer medical questions….unless you can use the guaranteed insurability option”
The response is invariably
“What the hell is a guaranteed insurability option???
Don’t worry, it’s less confusing than it seems.
Let’s look at it in plain English:
Guaranteed insurability (also known as the life events options) lets you increase your cover without the need to undergo medical underwriting.
It is available on some life insurance, mortgage protection and income protection policies.
But you can only use the option in the event of one of the below taking place:
Some insurers offer it on both their mortgage protection and life insurance policies.
But be careful because other insurers will only offer it on life insurance or mortgage protection policies.
As always, read the fine print!
No, one of our providers does not even restrict guaranteed insurability to a life event as listed above.
This life company will allow a policyholder to increase their cover by 20% every 3 years, up to 5 times without answering any medical questions.
But this option does incur a small extra charge.
Unlike a conversion option, you don’t have to pay extra premium to add the life events option.
Last week Sarah rang me looking for advice.
She had a baby last year so her apartment was no longer suitable for her needs.
As all new parents know, your baby is born with a magical ability to shrink your house in a matter of days.
Sarah required a mortgage of €65,000 to buy her new home (she was selling her old one). She had been approved for her mortgage but her bank wouldn’t let her increase mortgage protection without doing a full medical.
Unfortunately Sarah had been diagnosed with Multiple Sclerosis last month.
She was distraught.
I ran her case by my underwriters at the other insurance companies but didn’t have any joy. Nobody was willing to offer her insurance as the MS diagnosis was so recent.
Believing I had exhausted all options, I was about to contact my specialist insurer that deals with declined life insurance cases but then I had my Eureka moment – they don’t happen too often, believe me.
Increase Mortgage Protection with the Life Events Option!
Feeling confident I had found a solution, I called Sarah and asked her to check with her bank whether she could exercise her life events option to increase mortgage protection without doing a medical.
Computer says no, was their fairly predictable response.
Never being one to trust banks, I asked Sarah to find her policy documents and email them into me.
Lo and behold, in large letters on her policy cert were the words:
Armed with this, Sarah went back to her bank… …she has been approved for the extra €65,000 without the need for medical evidence and can now buy her new home for her new baby to wreck!
1) Don’t trust your bank – always question them.
2) If you’re getting nowhere with your bank, get some independent advice from your financial broker. A fresh pair of eyes may help.
There are variations in each of provider’s terms and conditions as to how and when it may be exercised including:
Maybe you’ll experience ill-health in the future and because of that, you’ll presume you can’t get more cover.
But if you have guaranteed insurability built into your cover, this is not the case.
It’s something to seriously consider when choosing your insurer.
If you’d like to know which insurer I recommend for the guaranteed insurability option, please get in touch using the form below.
Or if you prefer to schedule a call that suits us both, click here to open my diary and arrange a free 15-minute phone call.
Finally, if you just can’t wait to find out…..call me on !
Chat soon
Nick
As Ireland's leading independent insurance broker, we specialise in comparing the rates and policies from the top five Irish life insurance providers and offering the very best value quotes to suit the individual needs of our clients. Our expertise lies in finding a suitable insurance plan for those with specific needs, be it a particular illness, occupation or claim history, we've got you covered in every sense!
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