Guaranteed insurability option (GIO)

The specific circumstances in which you can increase your life cover using the guaranteed insurability option will be outlined in your existing policy.

Generally, the insurer provides a list of certain life events or life changes that would qualify for an increase in your protection.

The table below shows some insurers we work with and the list of life-changing events they offer with their standard cover:

You’d need to provide appropriate evidence to the insurer of the life-changing event, within a specified time limit.

For example, with Zurich, you must apply for the guaranteed insurability option and provide the evidence they need, within 90 days of the life-changing event occurring.

Legal & General give you a much longer time limit, up to 6 months.

At Reassured, we can compare quotes from major life insurance providers to see if we can help you find your perfect policy.

With a whole of life policy, you may need to increase your sum assured to meet an increase in inheritance tax (IHT) liability.

In this case, the maximum amount you can increase to is usually higher than for other life-changing events.

The table below shows the maximum age limit and maximum increase for each insurer for whole of life cover.

Also shown is the maximum age limit to use GIO and maximum increase for each insurer if the reason for the increase is due to an increase inheritance tax (IHT) liability.

If the increase in sum assured is due to the Government announcing a change in IHT legislation, then the maximum increase amount and the maximum age is significantly higher.

Not all policies include guaranteed insurability (or the option to increase your cover).

Usually, your existing policy must be accepted on standard terms (which means you pay a standard premium rate).

Though it’s important to note that there may be other exclusions or restrictions not listed here.

Your eligibility for this benefit is determined by the insurer and your individual circumstances.

If you have a joint life insurance policy, then the guaranteed insurability option may still apply to you.

It’s just that both policyholders would need to meet the same criteria as described by the insurer for a single policyholder.

For example, the maximum age limit would apply to both policyholders at the time of the life-changing event.

There are several differences between increasing life insurance and guaranteed insurability.

First of all, increasing life insurance is a type of policy, whereas the guaranteed insurability option is an additional policy benefit.

When you opt for increasing life insurance, you agree that the sum assured (pay-out amount) will increase each year by a fixed amount during the term of the policy.

Premiums will also increase, usually on an annual basis, in line with the increased sum assured.

The purpose of increasing life insurance is to protect the policy’s value against the rate of inflation.

Whereas, the purpose of the guaranteed insurability option is to ensure that the sum assured of your policy is still meeting your needs following a life-changing event.

Information taken from insurers websites is correct as of 06/12/2024