What is guaranteed issue life insurance?
Guaranteed issue life insurance is coverage for which you cannot be turned down, regardless of your current health. It is available to people between the ages of 50 and 85 (in most states) and in amounts of $2,000 to $25,000.
What can the benefits be used for?
The benefits are typically used by the beneficiary to pay off any outstanding debts left upon your death. This could range from funeral costs and other final expenses to medical bills and outstanding credit card debt. There is no limitations on how the benefits can be used.
Why do I need it?
Funeral expenses are growing; in 2016, the average funeral cost was $9,000 and that is without a plot and headstone. Most people do not want to burden their loved ones with the costly responsibility, and therefore take out coverage to protect their family from the rising cost of burial.
When should I buy it?
A guaranteed issue policy can be purchased anytime between the ages of 45 and 85, but it's important to keep in mind that the cost is lower when the policy is placed at a younger age.
Is it true that I won't be turned down if I apply for this type of coverage?
Yes, it is true. A guaranteed issue life insurance policy does not require a medical exam, and makes life insurance available to those who have a medical condition that might otherwise prevent them for being insurable.
What if I die soon after purchasing this policy? Will it still have a payout?
The death benefit for a guaranteed issue policy is graded, which means that if you pass away within the first few years of having the coverage from a medical condition that was already known about, the full policy amount would not pay out to your beneficiaries. Instead, they will typically receive the amount you paid in premiums, plus interest. However, if you pass away due to an accident, most carries will pay the full benefit regardless of how long you have had the policy.
What are the advantages of this type of coverage?
- It's simple. A guaranteed-issue policy can be purchased quickly and easily, online or over the phone.
- There is no medical exam, and you cannot be turned down.
- Cost-effective premiums. The younger you get started, the less expensive the cost.
What disadvantages are there?
- Price. A guaranteed-issue policy is more expensive than a traditional policy.
- Waiting period. Most companies require a two-year waiting period before the policy takes effect and a full benefit is paid.
- Limited coverage amounts. It's important to ensure that a guaranteed issue policy will actually cover your final expenses.
One of our experienced insurance representatives can help you determine what type and amount of coverage is right for your needs.