Life is full of unexpected changes, and your insurance should be able to keep up.
Enter the Guaranteed Insurability Option (GIO) – a feature that lets you adjust your cover as your life evolves. From family changes to moving house, GIO ensures you’re always protected.
Guaranteed Insurability Option
Life insurance policies have several features and benefits designed to offer policyholders flexibility and peace of mind.
One such feature is the Guaranteed Insurability Option, commonly referred to as GIO.
The GIO is a valuable option that may already be included in your life insurance policy.
At its core, it’s a promise by the insurance company that allows policyholders to increase their sum assured, under specific circumstances, without the need to undergo further medical underwriting.
This means that even if your health or other circumstances have changed since you first took out the policy, you can still increase your cover without those changes affecting your premium or eligibility.
When can you use a GIO?
Some reasons you might want to increase your protection using GIO include:
- Changes in your mortgage
- Family growth
- Changes in marital/civil partnership status
- Increase in your salary
If you decide to use the GIO, you can increase your cover without providing any additional medical information. This is a more convenient alternative to getting a new policy, which would necessitate new underwriting and could result in higher premiums.
The specific circumstances under which you can use GIO to increase your life cover will be detailed in your policy.
Generally, insurers provide a list of life events or changes that qualify for a cover increase. You’ll need to give the insurer evidence of the life-changing event within a specified time frame.
For instance, with Zurich, you must apply for GIO and provide necessary evidence within 90 days of the event.
Some life insurance policies offer GIO as a standard feature, giving you the option to increase your cover if your needs change. This benefit might be referred to by other names, such as ‘guaranteed increase option’, ‘special events option’, or ‘life change benefit’.
It’s one of several additional policy options provided by insurers, alongside premium waivers and indexation benefits.
Calculating the new premium
When using GIO, your new premium is calculated using your age, the new cover amount, and the term’s length. Other factors, like your smoking status, might also be considered. Insurers often set a maximum age limit for using GIO, typically around 54 years, although this can vary.
Limitations and Exclusions
It’s essential to note that not all policies come with GIO.
Your policy must usually be accepted on standard terms for GIO to be included.
There might be instances where this benefit is excluded or restricted, such as if you’ve been diagnosed with a terminal illness, have a medical condition that affected your initial policy, or if there are outstanding premium payments.
The Guaranteed Insurability Option might also apply to critical illness cover, either as a separate policy or part of your life cover. The terms of GIO with critical illness cover will be specified in your policy documents.
In summary
The Guaranteed Insurability Option, or GIO, is a little known feature found in many life insurance and mortgage protection policies.
Designed with the foresight of life’s unpredictable nature, GIO offers policyholders the flexibility to adjust their cover in response to significant life events. Whether it’s a change in your mortgage, the birth of a child, a change in marital status, or a significant salary increment, GIO ensures that your life insurance remains relevant and adequate.
Unlike the process of obtaining a new policy, which requires fresh underwriting and can lead to increased premiums, GIO allows for an enhancement in cover without the need for additional medical information. This feature is particularly beneficial for those who might have experienced changes in health or other circumstances that could affect insurance premiums or eligibility.
Not all policies come with this benefit, and there might be restrictions based on individual circumstances.
