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Guaranteed Issue Life Insurance

Guaranteed-issue life insurance coverage is a type of no-exam permanent life insurance policy that does not require the policyholder to undergo medical underwriting or meet any specific health criteria in order to be eligible for coverage. It’s usually intended for older folks who may have health conditions that prevent them from getting other forms of life insurance.

Basics of Guaranteed Issue Life Insurance

Guaranteed issue insurance coverage amounts focus on funeral and burial expenses without taking from an inheritance or estate. Typically, guaranteed issue death benefits are smaller than traditional life insurance products, and the premiums are higher

A guaranteed issue policy is oriented towards providing a form of life insurance for those who may not qualify for other options because of age or health. Most policy seekers can’t be turned down unless they land below or above an age range requirement.

The death benefit payout usually varies from $5,000 to $25,000. If the policyholder passes away within the first few years after being issued the policy, the insurers may have the option to refund the premiums paid up to that time. This is known as graded benefits, and it may result in a slightly lower premium for the policyholder.

The exact cost of a guaranteed issue policy will depend on a variety of factors, including the policyholder’s age, the amount of coverage they are seeking, and the length of the policy term.

It’s important to note that guaranteed issue policies often have a waiting period before the full death benefit is payable. During this waiting period, which is typically two or three years, the policy will only pay out a limited benefit, such as the premiums paid plus interest. This waiting period is in place to prevent policyholders from taking out a policy with the intention of immediately claiming the full death benefit.


When to Buy a Guaranteed Issue Policy

Monthly payments or monthly premiums for these policies can be much higher than for term life and even higher than whole life insurance policies in certain cases. High premiums and a low death benefit make them a last-ditch effort for most people.

However, if you’re having trouble getting life insurance after a term life policy has been completed, or because of advanced age or health concerns, a guaranteed issue policy can help you fund your final expenses. It can also protect your beneficiaries from increasing funeral and burial costs.

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Other Uses for a Guaranteed Issue Policy Benefit

Guaranteed-issue life insurance is often purchased to cover final expenses, but the cash payout from the policy can be used for any purpose. If burial and funeral costs are already settled, the beneficiary can use the death benefit for any purpose, such as:

  • Traveling
  • Buying a car
  • Medical bills
  • Paying for college
  • Making a down payment on a home
  • Paying for a wedding or honeymoon


Benefits of Guaranteed Issue Life Insurance

Some benefits of a guaranteed issue policy include:

  • No medical exam or medical questionnaires: as mentioned, one of the main benefits of a guaranteed issue policy is that the policyholder does not have to undergo a medical exam or answer any health questions in order to qualify for coverage. This can be particularly appealing to those who may not qualify for a traditional life insurance policy due to their health status.

  • Quick coverage: Because there is no medical exam or health screening required, guaranteed issue policies can often provide coverage much more quickly than a traditional policy. This can be important for those who need coverage as soon as possible.

  • Fixed premiums: The premiums for a guaranteed issue policy are typically fixed, which means that they will not increase over time. This can provide policyholders with long-term budget stability.

  • Fixed death benefit: The death benefit for a guaranteed issue policy is also typically fixed, which means that it will not change over time. This can provide policyholders with peace of mind knowing that their loved ones will receive a predetermined amount of money in the event of their death.

  • Give you peace of mind: you can help your loved ones with the financial burden which comes with funeral services

For questions about Guaranteed Issue Life Insurance or to get a quote, call our insurance agents at 830-468-5896 today.