Guaranteed Issue Life Insurance
Life Insurance

A Guide To Guaranteed Issue Life Insurance

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Guaranteed Life Insurance - No Exams, No Medical Questions

Guaranteed acceptance life insurance, a form of whole life insurance, has neither an exam nor any health questions.  The catch is the waiting period. Most of these policies won’t pay the death benefit for a period of up to three years. Why? No insurance company could survive if it wrote policies for people who were dying and who received benefits after only paying premiums for two months.

A Guaranteed Life Insurance Policy Works Like This

An application is required but there is no physical exam nor any medical questions. It is generally available in amounts up to $25,000. Most policies must be in force for at least two years before any death benefit is paid. Frequently purchased for end-of-life expenses, medical expenses, etc. A guaranteed issue life insurance policy satisfies many needs, particularly those whose health or age might otherwise compromise their ability to obtain other forms of life insurance.

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What Is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance (sometimes called “no questions asked life insurance” or “no questions final expense insurance”) is a type of life insurance policy that nearly everybody, no matter the status of their health, is eligible for. The policy’s wide scope of eligibility makes it the perfect solution for those who are ineligible for other forms of life insurance. 

With guaranteed issue life insurance, there is no:

Medical questionnaire
Lengthy waiting period
Required medical examination
Screening of your prescription and medical records by the insurance company

This lack of a screening process is what makes the life insurance policy “guaranteed.” Because there’s no screening process, virtually everyone is accepted.

Can You Be Denied Guaranteed Issue Life Insurance?

Yes. There are few cases in which people are denied this policy due to the product requirements, not the individual themselves. This means that someone is only ineligible if the following criteria are not met: 

  • Age. For most insurance companies, only people between the age of 50 and 80 years old can apply, however, some companies offer this policy to a wider age range.
  • State of residency. You have to live in the state that you are insured in.
  • Citizenship status. You must be a US citizen.
  • Advanced stage Alzheimers or dementia. You cannot have advanced Alzheimer’s or dementia that renders you incapable of entering into binding contracts.

So, there are a few stipulations that could prevent you from getting guaranteed life insurance, but they aren’t so prohibitive as to leave many people who might otherwise be denied by traditional providers without the coverage they need. 

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How Guaranteed Issue Life Insurance Works?

Guaranteed issue life insurance is a type of final sum life insurance, meaning that you pay into monthly premiums in exchange for a lump sum benefit once you pass away. There is no opportunity for building cash value or savings unlike other types of insurance policies. 

Typically this benefit will not be able to exceed $25,000, making the payout low compared to other policies due to the high-risk nature of clients who apply for guaranteed life insurance. 

How Much Does Guaranteed Issue Life Insurance Cost?

Again due to the high-risk nature of most guaranteed issue life insurance recipients, the monthly premiums are comparatively more costly than other policies. The typical cost of guaranteed issue life insurance will be somewhere around the $200 mark, but will of course vary based on your age and gender. 

The good news is that as long as you keep paying your premiums, your policy will remain active. 

The relatively low benefit and relatively high premiums may make it seem like you are getting ripped off. However, this is not the case. In fact, insurance companies that offer guaranteed life insurance do not often make a direct profit off of these policies. Instead, they make money by investing the money that you pay them, much like how a bank works. 

What To Keep In Mind About Your Beneficiary?

As with all life insurance policies, the benefit will be paid to whoever is named as your beneficiary. There are some important details to take note of with regards to how and when your beneficiary can receive your death benefit life insurance:

Your beneficiary will only receive the death benefit if you have been holding the policy for between two and three years (length of time varies depending on your insurance provider).
If you happen to pass away before that period is up, your beneficiary will receive a refund for the money that you paid into monthly premiums with interest. The standard interest rate is 10%.
It is possible to name a funeral home as your beneficiary so that your benefit can go towards covering funeral costs.
It is possible to name a funeral home as your beneficiary so that your benefit can go towards covering funeral costs.

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When You Should Consider a Guaranteed Issue Life Insurance Policy?

Guaranteed issue life insurance policies aren’t likely going to be your first choice, but they may be your only one. If you have loved ones or final expenses you want to take care of when you pass, but can’t get insurance through traditional policies, then this type of plan may be for you. 

Let’s look at some situations in which you might want to consider guaranteed issue life insurance: 

  • You have a terminal illness with a life expectancy of less than two years
  • You are on dialysis
  • You have had or need an organ or a tissue transplant
  • You have early stage Alzheimer’s or dementia
  • You are in a long term care facility
  • You have a cancer patient (and it’s not basal cell or squamous cell skin cancer)
  • You have AIDS or HIV
  • You are in a wheelchair because of a chronic illness or disease

 If any of these situations are true for you, and you have failed to qualify for other forms of life insurance, then guaranteed issue life insurance is a good option. 

Who Should Not Consider Guaranteed Issue Life Insurance?

Alternatively, there are also situations in which guaranteed issue life insurance will not be your best choice Those scenarios are as follows:

You can qualify for a better plan
You do not meet the specified requirements as previously stated (age, citizenship, etc.)
It is likely that you will live long enough to pay more in premiums than the sum of your benefit is worth

In these situations, it is best for you to evaluate alternative life insurance options. Whatever your circumstance, we can help.

Pluses And Minuses of Guaranteed Issue Life Insurance

For those who choose a guaranteed acceptance life insurance policy it is helpful to know the following:

  • Coverage caps may limit your policy’s face amount to a maximum of $25,000
  • Guaranteed issue life insurance companies policies are some of the most expensive compared to other forms of life insurance
  • Death benefits are paid only after a policy-specific contestability period of time has passed, usually two to three years. Before this time the beneficiary is paid the number of premiums paid thus far plus interest

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Making sure that your family or beneficiary has a sum to pay for final expenses, pay medical bills etc. is the #1 reason. This form of insurance is expensive and you should make sure you are ineligible for a regular life policy. You should get several quotes which you can do here at ConsumerCoverage.
For the majority of guaranteed issue life insurance policies, the monthly premiums will be around $200. This price will fluctuate slightly based on who your insurance provider is, your age, and your gender.
Generally speaking, those with serious illnesses who will not qualify for other policies should get guaranteed life insurance. However, each situation is unique to the individual, so only so much general advice is useful. Get a quote from us and get more specific advice.
Really! Aside from general informational questions about whether you meet the requirements, you will not be asked any questions about your medical history.