Guaranteed issue life insurance is a policy you can get without proving you are in good health. Many of these policies pay a smaller amount if you die in the first few years, then pay the full amount after that.
Who it fits
People with health problems who may not qualify for other life insurance.
- Who buys it
- Ages 50 to 85
- Medical exam
- Usually noDepends on age, amount and company
- Ages
- New York says its senior life (graded death benefit) plans are offered to people age 50 to 75 with no medical exam.
What to know before you buy
Florida says these policies are for people with health issues who may not qualify for other coverage, and very few applicants are turned down.
In the first few years, the death benefit may only equal the premiums you paid. After that, it goes up to the full amount.
VA's VALife plan is guaranteed acceptance whole life. If you die in the first 2 years, it pays back your premiums plus interest. After 2 years, it pays the full amount.
Actuaries note that simplified issue policies usually cost less than guaranteed issue ones. If you can answer a few health questions, compare both.
Minnesota requires a graded death benefit to be at least four times the first year premium. Rules differ by state.
Group life at work often does not ask health questions, and it usually costs less than buying on your own.
Common questions
Will I be turned down?
These policies accept almost everyone who meets the basic rules, like age. You do not have to prove good health.
What happens if I die in the first two years?
Many plans pay back what you paid in, sometimes plus interest, instead of the full amount. Read the waiting period in your policy.
Do I need a medical exam?
No. That is the main point of this kind of policy.
Is there a cheaper option?
If you can answer some health questions, a simplified issue policy may cost less. Group life at work is another place to look.
