Finding yourself in a spot where you feel life insurance is out of reach is a very upsetting situation to be in. Many people stop searching for a policy, thinking their time to purchase a policy has passed. After being denied for coverage, a lot of people feel lost or don’t know where to turn. They want to have life insurance, but don’t know how to get it.
If you have been declined due to a health condition such as diabetes, liver disease, kidney disease, occupational hazard, medical history info, such as attempted suicide, thoughts of suicide or your age you may be a great candidate for a guaranteed issue life insurance policy.
At TheLifeInsuranceBlog.com, we aim to help you.
Rising Popularity Of Guaranteed Issue Life Insurance
In the past, if you had been turned down for maximum life insurance protection, we understand that you truly felt as if you had nowhere to turn. You were faced with the decision of how to protect your family in the event of your passing and felt as if you were hopeless.
The good news is, now guaranteed issue life insurance policies will provide levels of coverage to those people who can not obtain traditional forms of life insurance which require underwriting and medical questions.
The increase in popularity of guaranteed issue life insurance can be attributed to multiple items such as:
- Increased age of applicants – especially those needing life insurance for seniors over 80
- Multiple health issues encountered
- People participating in hazardous activities
- Fast and convenient underwriting
- Reduced face amounts
- Level premiums
All of these contribute to why many people are now choosing guaranteed issue life insurance if they can’t obtain other forms of coverage.
We have even started to see a migration of people who can qualify for other forms of coverage, but are attracted to the ease and convenience of a guaranteed issue life insurance policy.
Understanding Guaranteed Issue Life Insurance
Guaranteed issue life insurance goes by many names such as burial life insurance plans, final expense plans, guaranteed acceptance, and many others. These policies may go by many different names, but the key attributes of a guaranteed issue life insurance policy will include:
- No medical questions
- Guaranteed acceptance
- Level premiums
- Permanent coverage
- Reduced face amounts
- Possible waiting periods
One of the most distinguishing factors between traditional life insurance and guaranteed issue life insurance is no medical questions are asked with guaranteed issue life insurance, and no exam is required.
This is not to be confused with no medical life insurance, which does not require a medical exam, but does require medical questions. It is important to note no medical life insurance is not the same as guaranteed issue life insurance.
Guaranteed acceptance means exactly what it sounds like. As long as you fall within the insurance company guidelines of age and amount you will not be turned down for coverage. As we like to say, “if you want it, you get it.”
One of the best features of guaranteed acceptance life insurance is the level premiums. This means your monthly (or annual) payments will be level throughout the rest of your life. This is regardless of what comes up in the future, or any decreases in your health, etc… This can be a very important feature for those who are seeking out this type of policy. While some plan’s policy premiums change based on age, these premiums will stay consistent.
The last two features of guaranteed issue life insurance policies are designed to protect the insurance company. Many life insurance carriers will only offer guaranteed issue life insurance policies up to $25,000 in coverage. For some people, this might be enough coverage, but for others they may want more than that. We can stack policies with different carriers though if you wish to obtain more coverage.
This allows the insurance carrier to lower their risk, as most people who purchase these types of policies do have some condition which keeps them from traditional forms of coverage.
The second way insurance carriers lower their risk is through waiting periods on the policy. These vary per policy, and per company but must be understood when purchasing a policy.
If the insured passes away, for example in the first two years, the insurance company will pay the beneficiary the premiums which were paid plus interest (which varies per policy). This is to help the insurance company from losing large amounts of money to those who are extremely high risk and have no life expectancies. For most applicants, these waiting periods are not a determining factor, but it should be known when buying a life insurance policy.
Advantages Of Guaranteed Issue Life Insurance
All of the clients that we work with who we recommend guaranteed issue life insurance for have been pre-qualified for other types of insurance first. Guaranteed issue life insurance is not for everyone, but it does serve a very important segment of the marketplace.
Guaranteed issue life insurance can provide the safety net of life insurance for those who never thought of life insurance as a possibility. Some of the more common cases in which we would recommend guaranteed issue life insurance may include:
- Certain levels of obesity
- Heart complications
- Recent operations
- Mental disorders
Many of these conditions depending upon the stage can be insured with traditional life insurance policies, but once they get to a certain stage a guaranteed issue life insurance policy may be your only option.
These specific policies will create the peace of mind in knowing your beneficiaries will always be able to receive the proceeds of the policy regardless of your health or condition.
Guaranteed issue life insurance policies are also very fast to issue since they do not require medical underwriting, and will be accepted upon submission. This ease of application and rapid decision is very attractive for those looking for a policy.
Know Your Options
As mentioned, guaranteed issue life insurance is not for everyone. If you can qualify for a traditionally underwritten life insurance policy, or a no medical insurance policy we would urge you to try to obtain one of those policies first.
This is because guaranteed issue life insurance is more expensive when it comes to coverage options. Insurance carriers understand people who seek these policies are higher risk individuals and they must compensate for this additional risk.
They compensate the higher risk through higher premiums. Getting a traditional policy can save you thousands of dollars on your policy through the years. Although this is not of much concern if you cannot qualify for any other policies, it should be noted.
Understanding the waiting period is one of the most overlooked parts of purchasing a guaranteed issue life insurance policy. Many people enter into these agreements thinking they are covered in full on day one.
You must know how long the waiting period is on the policy and what the payout structure is if you pass during the waiting period. Communicating this information with your beneficiaries is also crucial.
Many beneficiaries have gone to collect on a policy to find out they are only receiving premiums which were paid into the policy. This is very bad news to receive, so it is best your beneficiaries are aware of how the policy works.
Declined For Coverage?
If you have been declined for coverage in the past, you may be a good match for guaranteed issue life insurance plan. However, do not jump to this conclusion without consulting with one of our experienced agents.
You still may have other options available with other carriers, or a guaranteed issue life insurance plan may be in your best interest.
Each situation is different, but protecting your loved one’s with a policy is important regardless of that type of life insurance policy it may be. There are dozens of different life insurance companies that work with applicants with severe health conditions. It’s all about finding the right company that will work with you. Instead of spending hours on the phones, answering the same questions, let us do the hard work for you. We can find the perfect company for your specific conditions.
Declined, but Still Important
After someone is declined for life insurance, the majority of applicants stop searching for a policy, but that is a dire mistake for you and your loved ones. If something tragic were to happen to you, how would your family pay for the funeral and all of the debt left behind? Would they have the money they need to get through the extremely difficult time?
The average funeral can cost as much as $10,000, which is hard for a grieving family to pay for. On top of that, most people would leave behind thousands of dollars in unpaid expenses like a mortgage, car payment, and credit card bills. One of the worst decisions you can make is to avoid buying an insurance policy because you were denied by a company. There is always a plan out there that will work for you, and we can find it.
Having a life insurance policy doesn’t have to break your bank. One of the best ways to get the lowest rates possible is to shop around with different insurance providers. Each company is going to have different premiums with their guaranteed issue policies. Instead of calling dozens of companies yourself and answering the same questions yourself, let us do all the tedious work for you. We can give you the best companies that fit your needs.
Guaranteed life insurance isn’t for everyone. If you can be accepted for a traditional plan, it’s almost always a better option. But, if you can’t get a traditional plan for whatever reason, don’t assume that you have to go without coverage. We can help you find the perfect plan to give you and your family the peace of mind they you deserve.