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Guaranteed issue life insurance benefits to know

Closeup of life insurance form
If you don't want to take a medical exam or are having difficulty qualifying for life insurance, a guaranteed issue policy may be for you.  Getty Images/iStockphoto

Life insurance can help provide a financial safety net for people who depend on you when you die.

When you have a life insurance policy, you make regular payments over time directly to an insurance company or via your employer. People you designate as beneficiaries then receive an agreed-upon amount following your death.

Many life insurance policies require a medical exam. If this isn't something you feel comfortable with — or want — there are exceptions to explore. One option is called guaranteed issue life insurance (also called guaranteed life insurance).

If you're in the market for this type of life insurance, or simply want to explore your options, reach out to an expert today who can help you get started with a free price quote

What is guaranteed issue life insurance?

Guaranteed issue life insurance is just what it sounds like: guaranteed (as long as you keep up with monthly premium payments.) Guaranteed issue life insurance policies don't require a medical exam or questionnaire, and the policies are generally targeted at people over 50. 

Firms know this is a higher-risk group of people. The insurance companies balance this risk by limiting the amount of payout you can buy - usually $25,000 or less. Monthly premiums are also more expensive than most term life and whole life policies. 

Guaranteed life insurance policies are a type of whole life insurance. Insurance companies charge more than other policies because they know policyholders are at higher risk and won't make monthly payments for as long as policyholders of other plans. Though medical exams aren't needed, you may come across other barriers, like age limits.

Benefits of guaranteed issue life insurance policies

If you're unable to get a less expensive kind of life insurance or don't want to take a medical exam, a guaranteed issue life insurance policy may be a good option. Shop around for a guaranteed life insurance policy if you: 

  • Don't want to take a medical exam or have a chronic health condition 
  • Need to cover end-of-life expenses you can't otherwise pay for
  • Want to leave a small inheritance 
  • Are unable to get approved for a less expensive life insurance policy
  • Are satisfied with a smaller amount of coverage, typically $25,000 or less

How much does a guaranteed issue life insurance policy cost?

Premiums for guaranteed issue life insurance are typically higher than other types of life insurance because insurance companies can't evaluate risks in the detailed way required for other kinds of policies.

Here's a look at the average monthly premium of three providers of guaranteed issue life insurance.

Not sure if you're eligible for a guaranteed issue life insurance policy? Speak to a life insurance professional now to find out.

How you can apply for guaranteed life insurance

The insurance company you choose will ask some questions during the approval process in order to set your monthly premium rate. Applications are typically simple and, generally, most people are approved unless they fall outside a provider's age range requirement. Not all insurance companies offer guaranteed life insurance. To find them:

  • Shop around online
  • Ask your auto, homeowner or renter's insurance agent if your provider offers guaranteed issue life insurance
  • Check with a financial adviser or an insurance agent 

Use the table below to start searching now.

Make sure the policy makes financial sense 

Remember, when you take out a guaranteed policy, you may get a smaller return if you don't pass away within the first few years of coverage because you are paying higher premiums. Make sure the math makes sense.

For example, if your monthly premium for a $25,000 policy is $167.00, you will have paid more than $10,000 five years into holding the policy. Still, though it's expensive, some coverage may be better than none at all.

As always, shop around and consult a financial adviser or insurance agent before you make a choice

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