Seniors: You May Want To Consider Life Insurance Guaranteed Issue

Written by Jack Davis

Perhaps you may have heard of a guaranteed issue life insurance policy before. This type of policy is advertised in senior magazines, on television, and spot-lighted through different senior programs around the nation.

Buying guaranteed issued life insurance affords you the opportunity to secure important life insurance where you otherwise might not qualify, but that doesn’t mean that it’s always the best option.

Life Insurance Guaranteed Issue

guaranteed issue life insuranceThe idea behind a guaranteed life insurance policy is the ability to secure life insurance coverage where you may have been declined for medical reasons, or simply a way to get insurance without having to go through lengthy applications and medical exams.

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Most guaranteed life insurance quotes require only your resident state, age, gender and if you are a tobacco user. It is a fast and simple process to apply. Perhaps ten minutes on a telephone call is all that is required on your part. You will be approved, generally, within 48 hours.  It’s as simple as that, but that convenience normally comes at a cost.

Guaranteed acceptance life insurance plans are called guaranteed because you won’t be declined for your health history, or for failing a medical exam, or for smoking, or even for kicking your dog (kidding on this one). This is because your medical history does not factor into the underwriting process. There are some companies that require you to answer five or six questions.

However, most life carriers do not require any questions be answered other than basic name and address and beneficiary information. Perhaps you’re concerned because you have certain conditions and you’re needing life insurance with kidney disease or affordable life insurance with health issues in general. We are here to assist you and answer any questions you may have. Our contact information is at the bottom of this page.

Dislike needles?  No free time? Travel a lot?

You may apply without having to go through extensive medical exams, such as urinalysis, blood work, or other annoying and invasive screenings. You can get life insurance coverage in as little as 24 hours. Some carriers can cover you within a couple of hours.

It may seem extremely convenient, and it is, but unfortunately, there are some drawbacks to escaping most of the life insurance underwriting hassles. Costs will likely be much higher, and you will be limited on your coverage amount.

Guaranteed Acceptance Life Insurance Plans

Guaranteed Issue Life InsuranceThe typical guaranteed issue life insurance plans have limited coverage amounts, such as $25,000, depending on your age. Each company varies and may only be able to cover up to $10,000 if you’re in an older age bracket. Good news is you may be allowed to buy a policy online from more than one carrier.

Insurance companies typically allow for issue ages from 50 to 85 years old, although this can fluctuate up and down depending on which company you’re applying with, and how much coverage you’re looking to purchase.

Each plan is structured to be a permanent insurance product, similar or equal to a whole life insurance policy. This means you’ll get a level death benefit for as long as you hold the policy, and your premium will be level also, so you don’t have to worry about rate hikes as you get older.

Unlike whole life, though, there might be some stipulations on payout depending on how long you’ve held the policy prior to your passing. If you pass away within the first two years due to an illness, (cancer, heart attack, etc.) the insurance carrier will refund 100% of your premiums paid PLUS 10-12% interest on top of the premiums paid.  If you pass away from an accident, full payment of your insurance policy will be paid to your beneficiary tax-free.   This is how the insurance company can leverage their risk when someone knows they are terminal, for example, and try to buy life insurance after receiving the bad health diagnosis.

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.  If you fall within the insurance company guidelines of age and amount desired, you will not be turned down for coverage.

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 changes in your health. This can be a very important feature to help you budget your current and future bills.

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. You can purchase a policy from more than one carrier if you wish to have more than $25,000 in protection.

By limiting their coverage to $25,000, 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 a very short life expectancy. For most applicants, these waiting periods are not a determining factor, but it must be known when buying a guaranteed issue life insurance policy.

Advantages of Guaranteed Issue Life Insurance

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:

Some 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 be approved and issued since they do not require medical underwriting. This ease of application and rapid decision is very attractive for those looking for a policy.

Rising Popularity of Guaranteed Issue Life Insurance

guarantee issue insuranceIn 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.

Want some good news?  Guaranteed issue life insurance policies are available to you and will provide levels of coverage to for you when you cannot 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
  • Up to $25,000 in face amounts
  • Level, guaranteed premiums for the life of your policy

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.

Guaranteed Issue Life Insurance Quotes

As mentioned, quotes are very easy to obtain, only generally requiring the state you currently live in, the coverage amount you want to apply for, your date of birth, gender and whether you use tobacco products.

Because the life insurance is guaranteed issued, your age and gender will automatically place you in a rating class of all other people your same age and gender. There aren’t multiple risk classes like in a regularly underwritten type of insurance product, so there isn’t a need to do any additional research or underwriting with separate classes.

Other than smoker or non-smoker, your age, gender and coverage amount all directly correlate to what premium you’ll pay, without variation to health class ratings. Very simple and fast.

Guaranteed issued life insurance affords you the opportunity to secure life insurance where you otherwise might not qualify.

For some, guaranteed issue life insurance is the only option, and because that means poor health is almost involved, the insurance company has a much higher risk in issuing the policy. Consequently, as we all know, there is no free lunch and premiums are much higher than standard insurance rates.

If you are simply buying life insurance guaranteed issue for its conveniences, you’re probably paying way too much. If you can still qualify for a policy requiring underwriting, your premiums could be drastically reduced by going through the full process.

While rates are quite high for guaranteed issue policies, their main advantage is still as good as other life insurance policies: they leverage your dollars for a death benefit. What this means is, rather than paying $10,000 out of pocket to cover your final expenses, you may pay quite a bit less depending of course when you pass away. An added incentive is your life insurance proceeds are delivered tax-free to your beneficiary.

Guaranteed Life Insurance Policy

A guaranteed life insurance policy may or may not work for your situation, but if you have poor health, have already been declined for coverage, or don’t think you’ll be able to qualify on a standard issue policy, it may be an excellent option.

Just remember, always purchase a policy that is in your budget. There is no sense in paying a high premium for years, then having to drop the policy later because you can no longer afford your premiums. As with any permanent life insurance policy, also research the company from which you’re buying from, as they do make a difference.

As you can see, these guaranteed life insurance policies have several benefits, quick, easy, and convenient, but they also have several disadvantages. You need to weigh those pros and cons and see if one of these plans works for you. Don’t make any decisions until you’ve considered all your options.

Life insurance is a vital purchase that could drastically impact your family if anything tragic were to happen to you or your spouse. It’s important that you make the right decision for you and your family.

Declined, but Still Important

guaranteed acceptance life insuranceOften, when someone is declined for life insurance, many 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 the debt left behind? Would they have the money they need to get through the extremely difficult and emotional time of losing a loved one?

The average funeral can cost as much as $15,000, which is very hard for many families to pay for in cash.  The emotional loss is devastating. Let’s not make the financial loss stressful as well for your loved ones.  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 almost always a plan out there that will work for you, and we can help you 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 over and over, let us do all the tedious work for you. We can give you the best companies that fit your needs in one telephone call. We have decades of experience in the life insurance industry.

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 must go without coverage. We can help you find the perfect plan to give you and your family the peace of mind you all deserve.

Other Options

If you’re in poor health, or have a severe pre-existing condition, don’t think that guaranteed life insurance is your only option. Even if you’ve been declined in the past, there is a chance that you can still get an affordable traditional policy with medical underwriting.

Because each company is different, all of them look at various health conditions differently. For example, some companies have more experience working with diabetics, which means they may view anyone with diabetes more favorably than other companies. That’s why it’s important to look around or ask an agent who has experience.

Unless you just want to secure life insurance coverage quickly, guaranteed issue life insurance should always be your last option. These policies are going to be more expensive than any other life insurance plan. However, sometimes guaranteed issue is your only option.

The Importance of Life Insurance

Life insurance is one of the most important purchases that you can make for you and your loved ones.  If you were to pass away tomorrow, your family would be left with all your debts and none of your current income.  This is a recipe for financial disaster. If you are like most families, this would leave you holding onto thousands and thousands of dollars of unpaid expenses and perhaps a home mortgage. For a family that is struggling through the loss of a loved one, these ongoing bills can be staggering. This is where life insurance comes in to help right away ease the financial strain of losing a loved one.

Regardless of which type of policy that you decide to purchase, it’s important that you have coverage and that you have ENOUGH coverage. Before you purchase a policy, make sure that you’re getting enough coverage. There are several things that you must consider when deciding how much life insurance coverage you need.

As we mentioned earlier, one of the main purposes of life insurance is protecting your family with enough money to pay off your debts if you were to pass away. Make sure that you sit down and add up all your unpaid and ongoing expenses. A lot of applicants are surprised to see just how much debt they have with mortgages, car payments, credit card bills to name just a few. After you know how much debt you have, make sure that your policy will pay off all or most of your total debts. With a guaranteed issue plan, you may not be able to get enough coverage from one plan to cover all your debts. However, you may purchase a guaranteed issue policy from more than one carrier.

Another goal of life insurance is to replace your income if you were to pass away. If you have family members that rely on your salary, would they struggle if they no longer had that income? That is an easy question — of course they would! How would they replace your income?  They probably wouldn’t!  It is these primary reasons why life insurance is so important. It will give your family time to emotionally recover without having the additional burden of having to figure out how they are going to pay the bills at the end of the month.  There is no “magic number” but most insurance agents say that seven – ten times your annual salary is a good target for a life insurance policy.

Getting the Lowest Rates on Guaranteed Issued Policies

Because there are so few factors that go into determining your life insurance rates, there are only a couple ways that you can lower your rates, but one of the best ways is to stop all tobacco usage. We mentioned that the only questions the insurance company is going to ask you is your birthday, gender, and if you use tobacco products. Two of these things you can’t change, but one of them you can, your tobacco usage.

Being listed as a smoker on your life insurance application can cause your monthly premiums to often double or even triple. Because you’re going to be paying more for your guaranteed issue policy, it’s important that you get the lowest rates possible, and the best way is by kicking your tobacco habits. Before you start your life insurance search, take the time to cease all tobacco usage. Your doctor, your loved ones and your wallet are going to thank you.

The best way to ensure that you’re getting the lowest rates possible is by doing some comparison-shopping for your policy. Because there are so few factors that go into calculating your monthly premiums, each company will have rates that are somewhat similar but certainly not the same. It’s important that you get quotes from several different companies before you choose the one that works best for you. Again, your independent insurance agent can help you gather quotes quickly over a telephone call. There are many different companies that sell guaranteed issue policies. Instead of spending hours and hours on the phone talking to different agents, let us do all the work for you. Simply fill out the quote form on the side and you will receive various quotes quickly.

Please feel free to contact us with any questions or concerns you may have, not only about guaranteed issue insurance coverage but about other needs as well. We can help you save time and money as we represent dozens of leading different life carriers. It’s important that you make the best life insurance decision. Our agents are extremely knowledgeable about the different types of life insurance and can point you in the direction of the best policy to fit your needs.

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About Jack D. Davis
About Jack D. Davis

Jack has been an independent life insurance agent since 1985 with a focus on helping families and small business owners.  Jack’s calm approach is very much appreciated by his clients when explaining what type of policy is needed for their unique situation.

You can reach Jack at 800.277.3098 or email: Info@JackDDavis.com

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