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Guaranteed Issue Life Insurance [Best Companies and Policies]

Researcher & Writer
March 31, 2016

Finding the best guaranteed issue life insurance carriers starts with knowing where to look. There are literally a thousand different life insurance companies. The team at TermLife2Go is here to help you zero in on the companies offering the best life insurance in the U.S.

Guaranteed Issue Life Insurance: the best Companies and Policies

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?

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.

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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.

Is the death benefit active immediately?

This depends on your guaranteed issue life insurance carrier. 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. However, consider this: Research has shown that life expectancy increases with a desired goal. It may turn out that your 2 year graded death benefit gives you the needed goal to outlive your diagnosis and beat the odds.

Graded Death Benefit Limitation

  • 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. The average customer purchasing a guaranteed life insurance policy is over the age of 50, although in most states, guaranteed issue is available for ages 40 - 80. See our best cash value whole life insurance and best life insurance for seniors articles for more.

What about Pre-Paid Funeral Plans?

Some people go the route of prepaid funeral plans vs life insurance. However, there are drawbacks to prepaid funeral plans, such as the lack of flexibility or the funeral parlor going out of business.

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 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.

What is the point of getting a life insurance policy that only offers a $25,000 death benefit?

Believe it or not, dying is expensive. There are funeral, burial, obituary, and legal costs associated with dying. When you pass way, the last thing you want to do is burden your loved ones with these final expenses. Purchasing a guaranteed issue life insurance policy will help provide your survivors from financial hardship by offering them the means to pay for your final expenses, as well as things like lost wages that occur when a loved one dies. For more on this topic, please visit our article on burial insurance or final expense insurance.

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. Contact the professionals at TermLife2Go for a free life insurance consultation.

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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.