What Is Guaranteed-Issue Life Insurance?

Guaranteed-issue life insurance, also known as guaranteed-acceptance life insurance, is a type of whole life insurance policy that requires no health questions, medical exam, or review of medical records and prescriptions.
It is also marketed as “no-questions-asked life insurance” or “no-questions-asked final expense insurance.”

However, this type of policy has an important condition: a waiting period. If you die during that period, your beneficiaries will not receive the policy's death benefit. Most policies have a two-year waiting period; some have three.

If you die during the waiting period, the insurance company will refund all of your premiums to your beneficiaries, plus interest, generally at a rate of 10%.

Insurance companies established this waiting period because otherwise anyone could apply on their deathbed and pay a few hundred dollars to secure a $25,000 benefit for their family. No insurance company could remain in business that way.

Guaranteed-issue life insurance provides coverage to people with illnesses who otherwise could not obtain it.

How Guaranteed-Issue Life Insurance Works

These policies get their name because insurance companies guarantee that they will issue you a policy as long as you fall within the permitted age range when you apply. Typically, that range is 50 to 80. If you are outside it, you may still be able to obtain a guaranteed-issue policy from some insurers, but you will have fewer options.

Insurers market this type of policy to people whose health and age make other coverage difficult to obtain. However, people in this age group, including those with health problems, have options beyond guaranteed-issue life insurance. This coverage is best for people who have no other options because of their health, or who cannot afford any other option because of their health.

Which Conditions Will Disqualify You from Any Other Type of Health Insurance?

• You have a terminal illness with a life expectancy of less than two years.
• You have had or need an organ or tissue transplant.
• You are on dialysis.
• You have Alzheimer's disease or dementia.
• You are in a nursing home or hospice.
• You have cancer other than basal cell or squamous cell skin cancer.
• You have AIDS or HIV.
• You use a wheelchair because of an illness or chronic disease.1

If you have ever had an elderly parent or grandparent, you probably know what life is like for someone with one or more of these conditions. They have good days and bad days. Sometimes you think they are near death, but suddenly they turn a corner and seem better than ever. Their physical health, mental health, and physical abilities can seem very unstable. For most insurance companies, this level of instability presents too much risk, but some specialize in accepting it.

Alternatives to Guaranteed Issue

Many applicants with health problems believe they could never qualify for a policy requiring medical underwriting, but that is often not the case. Life insurance premiums always depend on your age, height, weight, health, gender—some states still allow gender-based pricing—death benefit, and policy type. Anyone can obtain medically underwritten life insurance even if they have congestive heart failure, have had a heart attack within the past 12 months, or have had a stroke within the past 12 months, among other health conditions.

People who only want a small policy should consider guaranteed universal life insurance, which can provide coverage to age 100 or even 121. Guaranteed-issue policies are useful, but only for applicants who do not qualify for medically underwritten policies.

When Guaranteed Issue Falls Short

There are two situations in which a guaranteed-issue policy might not work out or be the best option: when the insured lives long enough for premiums paid to exceed the death benefit, or when the insured purchases a guaranteed-issue policy despite being eligible for one with medical underwriting.

Medically underwritten policies have lower premiums for the death benefit they provide. They also offer immediate death benefits or a graded death benefit rather than a waiting period.

No two guaranteed-issue life insurance policies are identical. As with other insurance policies, therefore, you should shop for the one that best fits your needs. That makes you more likely to find the best life insurance policies currently available. Look for affordable rates—payments you know you can maintain even if your financial circumstances change—because a lapsed policy helps no one except the insurance company. Most importantly, do not assume you cannot qualify for a policy with a health questionnaire. You will not know until you apply.

If you need more information about purchasing your life insurance policy, contact a Partners for Life agent at no cost.

Tel.: +1(855) 436-6552

WhatsApp: +1(951) 3470-053

info@partnersforlifeinsurance.com