Guaranteed Issue Life Insurance
Get the Coverage You Need
A type of permanent life insurance, Guaranteed Issue or Guaranteed Acceptance life insurance are policies that are guaranteed to be issued. That means regardless of your health, you cannot be declined or turned down. However, guaranteed issue life insurance generally offers low death benefit options with higher than normal premiums.
The basics
Celebrities on TV ads tell you about a life insurance policy you can get with no medical exam. For some, "guaranteed issue" or "guaranteed acceptance" life insurance may be the only way to acquire coverage due to certain health constraints.
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Often marketed to the elderly and people with serious medical conditions, guaranteed issue life insurance covers anyone with no medical examination and asks few or no medical questions. Not to be confused with "simplified issue" or "quick issue" life insurance, which ask medical questions but don't require an examination.
Small dollar amount
Most guarantee issue policies have small face values, usually less than $20,000. This is they are designed for a specific purpose, such as to pay for funeral expenses. Most of the time these types of policies are offered to consumers between the ages of 50 - 85.
Guaranteed issue life insurance policies doesn't require a medical exam or underwriting. So, insurance companies have no information other than the applicant's age and gender on which to base the premiums.
Cost of guarantee issue life insurance
The cost of the plans is usually high because guaranteed issue life insurance policies don't rely on medical information to set premiums.
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The high premiums, combined with a low face amount for the death benefit, make guaranteed issue life insurance a less desirable option for relatively healthy individuals. For some of these policies, you could end up paying more in premiums than your beneficiaries will receive upon your death.
Limited payouts
In addition to the higher premiums, one of the main drawbacks to a guaranteed issue life insurance is that your beneficiaries wouldn't receive a full death benefit until your policy has been in force for a specific length of time (typically between one or two years, depending on the life insurance company). In the insurance industry, this is known as graded benefits.