It may also be known as guaranteed acceptance life insurance.
Guaranteed-issue life coverage amounts are often insufficient, typically between $10,000 and $25,000 The coverage levels of guaranteed issue life insurance are typically low. They can cover between $10,000 and $25,000 for funeral expenses and medical bills.
Guaranteed issue life insurance does not cover pre-existing conditions. While policies vary from insurer to insurer, some policies may cover people with chronic diseases. If you have a pre-existing condition, learn more about your options.
Most life insurance companies will refund your premiums to your beneficiaries, if you are unable to pay the death benefit due to illness or injury within the first few years. Investopedia says that this prevents people with serious illnesses from receiving large payments immediately.
Many guaranteed insurance companies require applicants at least to be 40 or 50 years of age to apply. No new coverage will be sold to those who are older than 80.
Guaranteed issue insurance requires that you make a call to an agent and fill out an application. An agent may contact your to verify you are not subject to disqualifying conditions and ensure you are getting the right amount.
Guaranteed issue insurance is different from term or whole life insurance. There are no health questions or medical examinations required for the application.
Imagine your policy offers a graded benefits. If you are unable to work or have a family member, your beneficiaries will be refunded 110% of the premiums paid. In this case, the policy's premiums will be refunded to your beneficiaries at 110%. If you die by suicide, or because of an accident in the first two years of coverage, your heirs receive a 100% refund. Your beneficiaries would receive $100 to $110 depending upon the cause of your death.
If the guaranteed-life insurance policyholder dies before the waiting periods are over, the beneficiary won't receive the death benefits. The insurance company might return all premiums paid to the beneficiary along with interest.
The same information is not required for guaranteed issue policies.
A category of policies known as burial insurance includes guaranteed-issue life insurance. Permanent coverage is recommended for people between 45-80 years of age and those who are unable to qualify for standard life insurance policies due to severe medical conditions or terminal illness.
People with special health needs should work with a life insurer who will search the market for them. Experienced agents will help you determine which life insurers are most likely to take you in based upon your health history.
Because guaranteed issue life insurance covers individuals with specific insurance risks, it is the most costly type of burial insurance. The monthly cost for a 60 year-old is upwards at $150. However, death benefit amounts can be quite low, reaching as high as $25,000.
Eligibility typically depends on your age, with policies often available to individuals between the ages of 50 and 85. The requirements may vary by insurer, but medical underwriting is not part of the application process.
While you can't be denied coverage for health reasons, most policies include a waiting period, often 2-3 years, before the full death benefit is paid out. If you die during this period, the beneficiaries may only receive a refund of premiums paid, plus interest.
Guaranteed issue life insurance can be a good option for individuals who have difficulty qualifying for traditional life insurance due to age or health issues. However, because of the higher premiums and limited coverage, it is important to consider whether it meets your financial goals and needs.