Guaranteed Issue Life Insurance: What is It and How Does it Work?

Shawn Plummer

CEO, The Annuity Expert

Guaranteed-issue life insurance is a policy that does not require you to answer any health questions to be approved for coverage. This can be an excellent option for those who have been turned down for coverage or those looking for a policy but don’t want to go through the hassle of answering health questions. In this guide, we will discuss what guaranteed life insurance is and how it works.

What Is Guaranteed Issue Life Insurance?

Guaranteed issue insurance is a type of life insurance policy typically designed for people with health conditions that make it difficult to get other types of life insurance. Guaranteed issue insurance is usually a permanent life insurance policy. Also known as Guaranteed Acceptance Life Insurance or Guaranteed Life Insurance.

If you have health issues or are older, guaranteed issue whole-life insurance can be a good way for your family to pay for funeral expenses, medical bills, or other expenses after your death. Permanent insurance will last your entire lifetime as long as you keep up with your premiums.

Shopping For Guaranteed Issue Life Insurance

When buying life insurance, be aware that most policies have a graded period of two to three years. If you die during this period, your beneficiary may not get the full death benefit. Instead, they will get back the premiums you paid with some interest. After that period is over, they will get the full benefit.

Does the guaranteed issue policy require a physical examination?

You might have to take a medical exam to get typical life insurance. This is because insurance companies need to know how long you are likely to live to determine how much your premiums will be.

Guaranteed issue life insurance is different because it is for older people who have health concerns. If you have a medical history, you will not be turned down for insurance. You also do not have to worry about doing a medical exam or answering health questions. However, you must meet other requirements, such as age limits, to qualify for this type of insurance.

Because insurance companies don’t take your health into account when issuing a guaranteed issue policy, the policies are more expensive than other types of insurance. As a result, the coverage you can get is usually limited to around $25,000.

How does guaranteed issue insurance work?

When you apply for guaranteed issue life insurance, your insurance company will ask a few questions to determine eligibility. Most people who apply for this policy cannot be turned down unless they fall below or above an age range requirement. Since there is no medical exam, health questions, or review of your medical records, the application process is generally quick and straightforward.

When you buy your policy, you will also choose the amount of coverage. This is called the death benefit. The death benefit is a graded benefit, which means that it will not start to pay out until after a certain period has passed. During that time, if you die, your insurance company will refund your premiums with interest to your family.

If you die during the graded period, your beneficiaries will receive the total payout. The beneficiary is the person who gets your death benefit and can be a spouse, child, or anyone else you choose.

When should you buy a guaranteed issue policy?

Some people may not be able to buy other types of life insurance because of their age or medical conditions. Finding peace of mind for yourself and your family can be challenging if this is you.

You don’t need to be in perfect health to qualify for other policies, like term life or simplified issue life insurance. However, you might be a better candidate for guaranteed issues if you have serious health issues. These conditions may include the following:

Guaranteed Issue Final Expense Life Insurance

Guaranteed issue insurance is a type of insurance that will help pay for funeral and burial expenses without taking away any money from your other assets. The payout from the insurance is given to your beneficiary without any conditions, so they can choose how to use the money. People often use these funds for the following:

Guaranteed Issue Life Insurance Cost

These are sample monthly payment rates based on age, gender, coverage amount, Preferred status, and non-tobacco consumers.

AgeGender$20k$25k$30k$40k
55Female$52.21$64.46$76.71$101.21
Male$65.30$80.81$96.32$134.18
65Female$78.82$97.72$116.63$154.43
Male$109.75$136.39$163.03$216.31
75Female$141.62$176.22$210.82$280.03
Male$196.74$254.13$293.51$390.28
80Female$193.66$241.28$288.89$384.12
Male$276.26$334.52$412.78$549.31

Simplified issue life insurance vs. guaranteed issue life insurance

Simplified and guaranteed issue life insurance does not require a medical exam. You will still need to fill out a health questionnaire. This includes significant illnesses or surgeries, family medical history, and prescribed medications. Simplified issue life insurance is suitable for people who want to get coverage quickly.

Simplified-issue life insurance policies have fewer health requirements than ordinary permanent or term life insurance policies but more than guaranteed-issue life insurance policies. So if you don’t want to take a medical exam and don’t have any significant concerns about your medical history, this policy could be a good choice for you.

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Need Help Getting Life Insurance?

Guaranteed Issue Life Insurance

If you have a preexisting medical condition and want to buy life insurance, you will need help from an expert. This person can help ensure you get coverage so you don’t get declined.

Warning: Applying for life insurance without a medical exam can be risky. If you get declined coverage, it could be at least two years before you can get any life insurance.

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Frequently Asked Questions

What is guaranteed acceptance life insurance?

Guaranteed Issue Life Insurance, or Final Expense or Burial insurance, is a Whole Life policy tailored to provide the resources required for end-of-life expenses such as hospital bills and funeral services. It’s especially beneficial for individuals unable to obtain traditionally fully underwritten policies due to medical conditions or lifestyle choices.
Coverage is ensured for eternity, with no age, wellness status, or professional limitations. During the first two years of coverage, if the insured passes away from health-related concerns, their beneficiary will receive all premiums paid in addition to a small interest amount; after that point, however, regardless of the cause of death – an entire death benefit would be granted to the designated recipient.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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