Guaranteed Issue Life Insurance – Is Guaranteed Good?

Written by Jeff Root

Guaranteed acceptance life insurance is a form of whole life insurance with a limited death benefit. As with all other whole life insurance policies this one will build cash value over time and your coverage will continue to last as long as you pay your premiums.

The one restriction you will find is that these death benefits are typically restricted to increments of $25,000 or less.

What you do see however is that no health questions will be asked when you apply. You also do not have to undertake a medical exam. The quotes for guaranteed acceptance life insurance policies are based entirely upon your age, your location, and your gender. It is simple to apply, and you get guaranteed, instant coverage, even if you apply online.

One downside to these policies is that the quotes will be significantly more expensive compared to any other option on the market because you are forgoing any health details and as a result, the life insurance company assume you are high-risk.

Should I Get Guaranteed Issue Life Insurance?

For people with health issues, guaranteed issue is incredibly expensive for the amount of coverage that receive, and this is simply because the insurance provider cannot collect or verify any of the information regarding your health and medical history. Naturally, it is the most convenient option, but it is not something you should pursue unless you are unable to qualify for any other form of insurance.

If you are a senior citizen or you have a pre-existing health condition you might be disqualified from traditional (fully underwritten) life insurance coverage, but you could try simplified issue coverage that has a few health-related questions before you apply for the guaranteed issue. You might also find a simplified issue term life insurance or universal life insurance policies that do not restrict you to a whole life policy.

The limited amount of coverage you are afforded means that this typically only covers end-of-life expenses like a funeral and burial services. If you are looking to secure enough coverage to send your children to college or to pay off your mortgage this will simply not provide a high enough death benefit for you.

There are a handful of medical conditions which will preclude you from qualifying for any fully underwritten or simplified issue policies in which case, guaranteed issue is best.

These include:

  • Being on dialysis
  • Having cognitive impairment
  • Living in a nursing home
  • Restricted to a wheelchair
  • Diagnosed with cancer, kidney disease, or HIV especially within the last 2 years
  • Any other terminal illness diagnosis

What Is A Graded Death Benefit?

The biggest hitch to the guaranteed Life Insurance is not that the coverage amount is limited or that the premiums are high. What you will find in the fine print is called a graded death benefit. This simply means a waiting period.

By comparison, other policies go into effect as soon as you sign the documents but would this one there is typically a two or three-year time where you have to wait.

The coverage does not go into full effect until after that. If you pass away from natural causes during the first two or three years your beneficiaries do not receive the full death benefit.

Typically, they will only receive the amount of money you have already paid in premiums plus interest. The amount of Interest they are given will vary from one insurance provider to another.

Why Choose Guaranteed Acceptance?

When choosing between these companies, or deciding upon the type of life insurance policy, consider this guaranteed issue policy for the following reasons:

1. You cannot be turned down

No matter your age, health, or any other circumstances, if you are between the age of 50 and 85 will never be turned down.

2. You won’t have to take a medical exam

You never have to answer any medical questions or take an exam. You do not have to disclose any information you do not want to.

3. Your premiums stay the same and you get living benefits

The costs will remain manageable and the same. No matter what happens, no matter what happens to your health, your costs will remain the same.

On top of that, if something should happen and you are diagnosed with a critical illness or terminal illness, you can get access in some cases to living benefits to help you through these times.

4. Your policy cannot be canceled

So long as you pay your premiums on time, you never have to worry about the policy being canceled.

Best Guaranteed Issue Life Insurance Companies

For guaranteed issue life insurance policies, Americo, AIG and Mutual of Omaha are your best options.

Americo AIG Mutual of Omaha
Age Availability 50-70 50-85 45-85
Waiting Period 3 years 2 years 2 years
Payout During Waiting Period
  • Premiums paid + 5% interest year 1
  • Premiums paid + 10% interest year 2
  • 75% of death benefit year 3
Premiums paid + 10% interest Premiums paid + 20% interest
Minimum Coverage $2,000 $5,000 $2,000
Maximum Coverage $10,000 $25,000 $25,000

Americo’s Eagle Premier Guaranteed Life Insurance

This company specializes in affordable guaranteed life insurance policies. If you qualify for what is called the Eagle Premier level you can add on the Accidental death benefit feature at no additional cost. This allows your family to receive two times your death benefit amount in the event that you pass away from accidental bodily harm within 90 days of an injury.

If you have health considerations like diabetes or if you are a smoker this company will not only guarantee the policy so long as you apply by the age of 55 but your coverage will not change, your premiums will not be raised, and your policy will not be canceled at any time. As a smoker or a diabetic, you will not have to undergo invasive medical examinations in order to receive a policy.

If you are a smoker this company offers what is called the quit smoking Advantage whereby you will qualify for non-smoker rates at the beginning of your policy if you attempt to quit. Many people who try to quit and use nicotine products to help with this are still categorized as smokers and charged as such.

With this company, you can use any form of tobacco or nicotine other than cigarettes and you will be qualified as a non-smoker. And if you are a smoker and you use cigarettes, you can have a few years where you have your nicotine levels monitored to show that you are trying to quit and have quit successfully.

If you do this you get to continue paying the non-smoker rates for your premiums.

If at the end of the first few years you haven’t quit, you have two options:

  • The first option is to continue paying the amount you are already paying but your coverage decreases over time
  • The second option is to keep the amount of coverage you have and simply increase the premiums you are paying to the standard smoker rate

AIG Guaranteed Issue Whole Life Insurance

AIG is the best for guaranteed acceptance life insurance policy because they allow you to receive a portion of your death benefit while you are still alive if you have been diagnosed with a terminal or critical illness. and then use those death benefits to pay off any medical bills you might have.

AIG also offers very competitive guaranteed issue life insurance rates. Their guaranteed issue coverage is only available for people between the ages of 50 and 85.

Their guaranteed issue policy comes with a two-year graded death benefit. On this policy, the maximum death benefit you can purchase is $25,000. The policy is very simple, very easy to understand and has a lot of riders that you can add to it.

You can add the accelerated access solution if you are diagnosed with a terminal illness. This feature allows you to access your death benefits early, tax-free, if you are diagnosed with a terminal illness and have less than 12 months to live.

There is also a lifestyle income solution which allows you to access part of your death benefit no matter what the reason is after you turn 85. You can also qualify for the quality of life feature where you can take out front of the death benefit to pay for critical illness costs.

AIG Guaranteed Issue Life Insurance Quotes

  • The average cost of their guaranteed issue life insurance policy annual premiums for a $25,000 policy ranges between $227 and $300 per year for a 40-year-old applicant.
  • The average cost of their guaranteed issue life insurance policy annual premiums for a $25,000 policy ranges between $595 and $690 for a 50-year-old applicant.

Mutual of Omaha Living Promise Policy

Mutual of Omaha offers two different guaranteed issue life insurance policies. The level benefit final expense policy will pay directly to your beneficiaries with up to $40,000 of coverage for anyone between the ages of 45 and 85. For this, you will have to answer a handful of medical questions, but the features included are things such as accelerated death benefits.

If you do not want to answer medical questions you can choose the living promise graded benefit final expense policy. This is a guaranteed whole life insurance policy for anyone between the ages of 45 and 80. This provides coverage between $2,000 and $20,000.

There is an accidental death benefit whereby your beneficiaries receive the full death benefit if you are killed in an accident. If you outlive the first two years of your policies and your beneficiaries receive the entire death benefit no matter how you pass away in the end.

This guaranteed issue policy will accept anyone who applies but the company protects against serious Financial Risk by implementing the graded death benefit. If you pass away within the first two years of your policy than your death benefit is not paid out to the beneficiaries.

Instead, they receive the total of the premiums you have paid so far plus an additional 10% interest so long as you passed away from natural causes and not accident or suicide.

The premiums you pay and the face value for your coverage will not change for the remainder of your policy. And the death benefit your beneficiaries receive is tax-free so long as you continue to pay your premiums on time.

Finding the Best Guaranteed Issue Life Insurance Policy for You 

While these companies are typically the best in the market for guaranteed issue life insurance, it is always recommended that you speak with an independent life insurance agent before purchasing a policy.

Our independent agents can help you compare guaranteed issue life insurance policies from dozens of the best life insurance companies on the market to help find the best policies, rates, and companies for your specific needs.

Give us a call today to speak to one of our agents, and find the best guaranteed issue life insurance quotes to protect you and your family.

Or, get started using our online guaranteed life insurance quote tool to easily compare guaranteed life insurance rates instantly.

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