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Guaranteed Issue Life Insurance

Researcher & Writer
March 28, 2020

Nothing can give you peace of mind quite like certainty, but unfortunately there aren’t many things in life with that kind of guarantee. Luckily, Guaranteed Acceptance Life Insurance is one of those few certain things you can count on. The name sounds nice, but what is it? This article will help you to get a more thorough understanding of guaranteed issue life insurance so that you can know if it’s the best type of life insurance policy for you.

What is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance, also known as guaranteed acceptance life insurance is a type of life insurance policy that doesn't factor in your health. These policies are generally geared towards the healthy or those with a pre-existing condition.

Most people who apply for a guaranteed issue policy can't be turned down unless you are outside of the age qualifications. 

A guaranteed issue life insurance policy is a sure-bet kind of life insurance policy. No matter what happens, as long as you’ve kept up with your payments while you were alive, your life insurance beneficiaries are sure to receive a cash payout after your death.

Do I need a medical exam for a guaranteed acceptance life insurance policy?

No medical exam or health questions required.

In fact, the main reason people usually get a guaranteed issue policy is because guaranteed issue life insurance companies offer it with no questions asked. If you have current or past health problems, you’ll still be eligible for a guaranteed issue life insurance policy. It’s called "guaranteed issue" for a reason—because you’re guaranteed coverage as long as you meet the minimum and maximum age requirements.

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Does a guaranteed issue policy have any stipulations?

This depends on your guaranteed issue life insurance company. However, in most (if not all) cases, guaranteed issue policies will only offer the death benefit two or three years after the issue of the policy. If you have been given a short period of time to live, then it may not make sense to purchase a guaranteed issue life insurance. 

  • Guaranteed Issue Life Insurance comes with a two or three year graded death benefit limitation. If you die due to natural causes in the first years of the policy, your beneficiary will receive your premiums paid. Some guaranteed issue companies will offer up to 10% more payout to your beneficiaries on top of premiums paid.
  • If you die due to an accidental death, your policy will pay out the full face amount to your beneficiary.
  • After the graded death benefit limitation period your policy will pay out for any and all causes of death, including suicide.

How much does a guaranteed issue life insurance policy cost?

The premium of any guaranteed acceptance life insurance policy will vary from person to person, insurance company to insurance company. The two main factors determining price are age and gender (some companies offer the same rates for both sexes).

That being said, guaranteed issue life insurance policies are typically more expensive than other policies, such as term life insurance policies. This is because when you go to purchase a term life insurance policy you have an end date and you are normally required to have a life insurance medical exam or provide a medical history.

However, a guaranteed issue policy is typically a cash value whole life policy, wherein you aren’t required to take a medical exam or provide medical information. Therefore, the life insurance company has no way of knowing if you’re likely to die in two or twenty years from now. Because of this lack of clarity about your health, guaranteed acceptance life insurance is often a more expensive choice.

Who normally buys a guaranteed issue life insurance policy?

Since getting a life insurance policy that requires a medical exam would be cheaper for younger, healthier people, usually policy seekers who opt for guaranteed issue life insurance are older and possibly have existing illnesses. 

How much coverage does a guaranteed issue life insurance policy offer?

Most life insurance companies put a cap on the death benefit of guaranteed issue life insurance policies. That cap is often $25,000 or less. If you need more coverage and you cannot qualify for a different type of coverage, one strategy is to take out a couple of guaranteed issue life insurance policies and stack the death benefits.

Stacking guaranteed issue policies from different carriers allows the insured to increase his or her death benefit beyond the individual company maximum.

Should I purchase a guaranteed issue life insurance policy?

Whether or not a guaranteed issue life insurance policy is for you really depends on a few things such as:

  • What are you looking to get out of a life insurance policy?
  • Are you healthy enough to get a good deal on a different policy instead?

These questions will help you to determine whether or not guaranteed issue life insurance is a good idea for you.

Which life insurance company has the best guaranteed issue life insurance policy?

When you look for a guaranteed issue life insurance policy or any other life insurance policy, it’s important to understand that every company is different. Some life insurance companies may offer substantially more affordable guaranteed issue life insurance policies than others. On the other hand, you may find that even with your current health, some life insurance companies will offer you an affordable term or whole life policy which may ultimately be a better option for you. 

If you have questions or are looking for guidance give us a call and speak with a licensed life insurance agent. Or if you are ready, go ahead and get a life insurance quote

Written by
TermLife2Go
We are a team of life insurance experts with the simple mission of helping you find the best coverage for your unique situation. We research, review, and rank life insurance companies to make that process easier.