Reader’s Question:

What should I know about a guaranteed issue life insurance?

James

Salt lake City UT

To those people who have been denied of coverage in the past because of health issues, guaranteed issue life insurance is a better option. It is a policy that is guaranteed to anyone without regard to health conditions. Although the risk of this coverage is too high for insurers, it is still being offered by them. How do insurers go around it? You will find the answers below.

Firstly, it has graded benefits. This means that death benefits are usually given out in full face value after the waiting period of the policy has lapsed, usually between one to three years. If the policy holder passes away during this period, beneficiaries would either receive a return of all premium payments plus interest or nothing at all. However, there is an exemption to this. If the insured dies of a fatal accident, death benefit is paid in full amount. Furthermore, a guaranteed issue life insurance is certainly not an option if you found out that you’ve got only 2 months to live.

Another way that insurers can make money on this policy is by charging expensive premiums. A guaranteed issue life insurance is basically a type of whole life insurance policy but its premiums are much higher compare to other regular life insurance policies because anybody, even those critically ill, can get cover. Moreover, this guaranteed issue whole life policy accrues cash value overtime usually after a couple of years. However, most insurance companies have age limits on this policy like not more than age seventy.

Since this policy is open to anyone, it doesn’t require any medical exam or even a medical history. Questions about basic personal information will only be asked such as your name, age, address, etc. Most guaranteed issue life insurance policies have a limited amount of death benefit claim. In fact, it is hard already to find coverage worth more than $50,000. Death benefits of this policy are commonly intended to cover medical bills, burial expenses and any outstanding debts.