Guaranteed issue life insurance, also known as Guaranteed Acceptance Life Insurance or Burial Insurance, is a policy that provides cash benefits to a spouse or family members to help pay for the insured’s final expenses. There are many insurance companies that sell these types of policies – some good, some not so good. If you are looking for a guaranteed issue life insurance policy over age 50, you need to be a prudent consumer and review all your options.
Who is Guaranteed Issue Life Insurance For?
Guaranteed issue life insurance is typically for people between the ages of 50 and 80 with current or previous medical problems. It is oftentimes a last resort The for individuals who can’t qualify for traditional coverage because of their serious health issues.
It’s a policy that will provide coverage for anyone who is willing to pay for it. These policies do not require a medical exam but some require a brief medical questionnaire. As long as you are not on your death bed or confined to a nursing home, the insurance company will issue a policy.
The Pros and Cons of Guaranteed Issue Life Insurance
If you want to get a policy without a medical exam or the insurance company probing through your medical history a guaranteed issue life policy could be the way to go.
Here are the positives of buying a guaranteed issue life insurance policy:
1. No medical exams or medical questions
2. Policies are issued within a few days if you qualify
3. Simple process for getting approved
Of course, these polices also have some drawbacks because the insurance company is issuing a policy without knowing much about your health history.
The negatives are:
1. Limited coverage amounts. Coverage varies between $5,000 and a maximum of $25,000
2. Guaranteed issued policies are more expensive than traditional life insurance policies
3. Some policies do not pay benefits if you die within the first 2 or 3 years
Is Guaranteed Issue Life Insurance A Good Deal?
The best life insurance over age 50 is a traditional policy where you take an exam and submit to the full underwriting process. It will be a much cheaper option if you are in fairly good health. But for some people, a guaranteed issue policy is the only choice they have because they have serious health issues.
Unfortunately, many people are led to believe by advertising and television commercials that if they have some health issues, they will not qualify for any coverage other than guaranteed issue.
This is not true because even if you have some health problems such as diabetes, heart problems or past history of cancer, you could qualify for a “Simplified Issue” policy and pay less.
Simplified issue policies only ask a few health questions, and people who are reasonably healthy, can qualify. These policies provide an immediate death benefit unlike most guaranteed issue policies that come with a graded death benefit. Typically, both fully-underwritten and simplified issue policies provide an immediate death benefit. This means that the insured person will be covered by the full death benefit the moment the policy gets approved.
What is a Graded Death Benefit Policy?
Apply for a traditional life policy typically involves going through the underwriting process of answering questions about your health, lifestyle habits and even financial background. This is how underwriters determine risk to the insurance company.
They use this information and medical reports from your doctors to assign a risk class. The amount you pay for your policy is dependent on all of the above. The insurance company might even decline your application if they feel you are an unwanted risk.
Since Guaranteed-Issue policies do not use underwriting criteria to approve your policy, they come with a waiting clause. This is called a Graded Death Benefit. These policies do not pay a full death benefit if you pass away within the first 2 or 3 years.
If the insured person passes away within the first 2 or 3 years, the beneficiary usually only receives the return of the amount of premiums paid plus 10% interest. The only exception to this death clause is if the insured dies in an accident. The policy will pay the full amount immediately. Once the graded death benefit limitation period ends, the policy will pay the full amount for any cause of death, including suicide.
Which Insurance Company Has The Best Guaranteed Issue Life Insurance Policy?
There are hundreds and hundreds of life insurance companies and most of them offer a guaranteed acceptance life insurance policy. Companies like Colonial Penn, AARP, Mutual of Omaha, Gerber, AIG and more all have similar products with just a different company name behind it.
Since Guaranteed Issue life insurance policies differ from company to company, you need to read the fine print and understand exactly how the policy works. Our agency can help you make sense of it all. Just call: 914-633-1717 for a free consultation.
Here are some notable Guaranteed Issue Life Insurance companies and their product features:
TransAmerica is a highly rated insurance company that has been in existence since 1904. They cater to the insurance needs of people over age 50. They offer Guaranteed Issue Life Insurance or final expense insurance policies up to $25,000 without a medical exam. Some health history questions are required but even people with serious health issues can qualify for a policy.
MetLife’s guaranteed acceptance whole life insurance requires no health questions or medical exams. If an applicant between the ages of 50 and 75 has been turned down by other companies, MetLife will issue you a policy regardless of your health situation. Coverage amounts start at $2,000 up to $25,000.
Gerber Life Insurance company offers guaranteed issue life insurance over age 50 to age 80. Coverage amounts from start at $5,000 up to $25,000 There is no medical exam required or medical questions to be answered. However, the company offers a Graded Death Benefit Policy with a 2-year waiting period for payout.
MassMutual Guaranteed Acceptance Life Insurance.
MassMutual is brand new to offering this type of policy. The company has been around for more than 100 years and has some of the highest financial ratings in the industry.
Choosing a MassMutual guaranteed acceptance policy means you are purchasing a high-quality product with a company that has excellent claims paying ability. Coverage is guaranteed throughout the life of the policy and the premium will never increase.
MassMutual offers coverage from $2,000 to $25,000 and there’s a 2-year waiting period. As long as you’re between the ages of 50-75 and reside in the US, you qualify for a MassMutual guaranteed acceptance policy.
Need Advice About Guaranteed Issue Life Insurance?
To get solid advice on any type of life insurance policy, just call 914-633-1717. We’re an independent agency that works with dozens of the best life insurance companies.
We can address your needs and answer your questions. Our consultation is free and we can make customized recommendations to help you decide whether a guaranteed issue policy is right for you or if you can qualify for a fully underwritten life insurance policy based on your current situation.