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📈 '''Future increase option''' is a [[Definition:Policy provision | policy provision]] — most commonly found in [[Definition:Disability insurance | disability insurance]] and [[Definition:Life insurance | life insurance]] contracts — that grants the [[Definition:Policyholder | policyholder]] the right to purchase additional [[Definition:Coverage | coverage]] at specified future dates without providing new evidence of insurability. Sometimes called a ''guarantee of insurability rider'' or ''future purchase option'', this feature locks in the policyholder's [[Definition:Insurability | insurability]] at the time the original [[Definition:Underwriting | underwriting]] decision is made, regardless of any health changes that may occur afterward. It is particularly valuable in [[Definition:Individual disability income insurance | individual disability income]] policies, where a young professional's income — and therefore their need for coverage — is expected to grow significantly over time.

🔄 When a future increase option is exercised, the policyholder typically receives an additional block of coverage at [[Definition:Standard rate | standard rates]] for their attained age, bypassing [[Definition:Medical underwriting | medical underwriting]] entirely. The option usually becomes available at predefined intervals — often every one to three years — or upon qualifying life events such as marriage, the birth of a child, or a documented increase in earnings. Each exercise window is time-limited; if the policyholder declines or fails to act within the window, that particular opportunity may lapse, though future windows generally remain available until the option expires (commonly around age 45 or 50). [[Definition:Insurance carrier | Carriers]] price the original policy to account for the [[Definition:Adverse selection | adverse selection]] risk inherent in these options, since policyholders whose health has deteriorated are far more likely to exercise them.

💡 From both a product design and [[Definition:Distribution | distribution]] standpoint, the future increase option serves as a powerful retention and value tool. It gives [[Definition:Insurance agent | agents]] and [[Definition:Insurance broker | brokers]] a compelling reason to recommend adequate initial coverage paired with a growth mechanism, rather than deferring the coverage conversation. For policyholders, it provides financial flexibility — they secure the right to scale protection in step with their earning trajectory, without worrying that a future diagnosis or lifestyle change could render them [[Definition:Uninsurable | uninsurable]]. Carriers benefit as well: the option drives [[Definition:Persistency | persistency]] and generates incremental [[Definition:Premium | premium]] revenue from an already-underwritten population, making it an efficient growth lever within an existing book of business.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Guaranteed insurability option]]
* [[Definition:Disability insurance]]
* [[Definition:Rider]]
* [[Definition:Insurability]]
* [[Definition:Adverse selection]]
* [[Definition:Evidence of insurability]]
{{Div col end}}

Definition:Future increase option - Revision history

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