Life insurance is an important benefit for most people – and especially for those who have loved ones who may be in need of financial assistance following the death of an insured. This can be the case, regardless of whether the insured’s death was unexpected, or due to natural causes at a later stage in the insured’s life.
For many, the purchase of a life insurance policy can be fairly simple, entailing the completion of an application for coverage (which asks about the applicant’s health condition and other key factors), as well as the taking of a medical examination where a blood and urine sample are usually required.
Those who may not be in the best of health, however, can oftentimes have a more difficult time in qualifying for life insurance – or at least the type of life insurance that requires a medical examination and providing details about one’s health condition. For that reason, guarantee issue life insurance can instead provide a viable solution for coverage.
What is Guarantee Issue Life Insurance and How Does It Work?
Guarantee issue life insurance coverage is a type of life insurance protection that can be issued to an applicant, regardless of his or her health condition. In fact, as long as the premium is paid, an applicant for this type of coverage cannot be turned down for a policy.
Typically, guarantee issue life insurance policies are a type of whole life insurance protection. This means that the insured will be covered with a death benefit throughout the remainder of his or her lifetime – provided that the premium is paid – as well as having the ability to build up funds in a cash-value component of the policy.
The cash that is inside of a whole life insurance policy is allowed to grow and compound on a tax-deferred basis. This means that there will be no taxes due on the gains unless or until the policyholder withdraws these funds.
The policyholder is allowed to take money out of the cash value by either borrowing or withdrawing it – and this cash can be used for any purpose by the policyholder, including the payoff of certain debts, the supplementing of retirement income, and / or even for things such as taking a nice vacation.
It is important to note, though, that while a cash withdrawal from a whole life insurance policy is usually not required to be repaid, if there is any un-repaid amount standing at the time of the insured’s death, this amount will be charged against the amount of the death benefit that is paid out to the policy’s beneficiary. Therefore, if the beneficiary is counting on a certain amount of money for paying off debt, paying the insured’s funeral and other final expenses, or for any other specific need, it will be essential to repay any borrowed funds.
Just as with other types of life insurance protection, the benefits that are paid out from a guarantee issue life insurance policy are received by the named beneficiary free of income taxation.
However, when purchasing this type of coverage, it is important to have a good understanding of how – and how much of – the death benefit will be paid out. For example, in some cases, a guarantee issue life insurance policy may only pay out a portion of the stated death benefit if the insured passes away within just a year or two after obtaining the policy. Alternatively, the beneficiary may only receive back the amount of premiums that were paid into the policy – possibly with an additional amount of interest.
The reason for this is so that the insurance company can protect itself financially from applicants who are typically riskier than those who are covered by a medically underwritten policy. If risk life insurance interests you, we can go over your options and help you get the coverage you deserve. (If the insured lives for a longer period of time than the time limit that is stipulated, then 100 percent of the stated death benefit will be paid out to the beneficiary). Therefore, it is always a good idea to inquire as to whether the benefits on a life insurance policy will be “graded.”
Guarantee Issue Life Insurance Versus Simplified Issue Coverage
It is also important to understand that a guarantee issue life insurance policy is not necessarily the same as a simplified issue life insurance policy. For example, while a life insurance policy that is simplified issue may not require the applicant to undergo a medical exam, these policies may still ask for health information from the proposed insured. And, if the applicant is currently suffering from certain health issues, he or she may be turned down for this type of life insurance.
However, with a guarantee issue life insurance policy, health condition is not necessarily a factor. And, the only way that this type of life insurance can be canceled by the insurance carrier once a policy is approved and in force is due to non-payment of the policy’s premium.
Likewise, if the policy is a whole life insurance plan, the amount of the premium will also be locked in and guaranteed not to increase – even in light of the insured’s increasing age, and even if he or she contracts a serious (or a more serious) health related issue.
Is Guarantee Issue Life Insurance a Good Option for Seniors?
While there are many who may be a good candidate for guarantee issue life insurance coverage, seniors may make up the largest group. One reason for this is because seniors seeking life insurance can often be more likely to have adverse health issues that can make it more difficult to qualify for a traditional, medically underwritten life insurance policy.
While there are some people who feel that life insurance is no longer needed when you are a senior, this is not necessarily the case. For instance, seniors may require life insurance so that a spouse or partner does not lose some or all of their retirement income sources. This coverage can also be a good way to ensure that a loved one is not left having to pay large debts, such as a home mortgage or other financial obligations.
But, even if there is no one who is currently depending on a senior for his or her financial support, a guarantee issue life insurance plan can still be a viable option for a senior. This is because most people – regardless of their age, gender, health condition, and / or financial status will have funeral and other final expenses that must be paid.
Today, the average cost of a funeral and other related costs can run in the range of between $7,000 and $10,000. This is particularly the case when you factor in items such as a memorial service, a headstone, a burial plot, flowers, transportation, and the cost of printing and distributing the person’s funeral notices.
How Much Does Guarantee Issue Life Insurance Coverage Cost?
Just like with other types of life insurance coverage, there are several key variables that will be considered when determining the cost of a guarantee issue life insurance policy. These will typically include the amount of the coverage that is being purchased, as well as the age and the gender of the applicant.
The face amount of many guarantee issue life insurance policies will usually not be high. For instance, many of these policies will offer benefits in the $5,000 to $25,000 range – although there are some insurance carriers that will offer a higher amount of benefit on these plans.
In turn, because the amount of coverage that is offered through guarantee issue life insurance coverage is not usually high, the premium that is charged may not be a high amount either – and it can, therefore, fit into many people’s overall budgets.
There are many of today’s top life insurance companies that offer a guarantee issue life insurance option, including AIG, New York Life, Gerber Life Insurance Company, State Farm, John Hancock, and Protective Life Insurance Company. However, because there can be many different options in terms of coverage amount and premium that is charged, it is essential to do a thorough comparison of different policies and premium charges before moving forward with a purchase.
Who Should Consider a Guarantee Issue Life Insurance Policy?
There are several potential candidates who may want to consider a guarantee issue plan, based on their age and / or their overall health condition. Guarantee issue life insurance coverage is often thought of as being a “last resort” type of coverage. This is because there are many people who apply for this type of coverage, knowing that they may not qualify for a medically underwritten policy due to a health condition.
With that in mind, those who may have certain serious health issues such as cancer or heart disease could be good candidates for guarantee issue life insurance coverage. There are others, too, who could also be viable candidates.
For example, because there is no need to undergo a medical examination to qualify for a guarantee issue policy, those who may be fearful of needles – and in turn, afraid of giving a blood sample – may also be someone who could consider this type of coverage. (In doing so, however, it is important to understand that the amount of the premium that is charged for a guarantee issue policy will typically be higher than that of a medically underwritten option – with all other factors being equal).
Where to Find the Best Premium Rates on a Guarantee Issue Life Insurance Plan
With most guarantee issue life insurance policies, the only stipulation for coverage acceptance is payment of the premium. Because of that, it can be important to compare the premiums that are required from several different life insurance carriers.
What many people may not be aware of is that, just like with other products and services that you purchase, the amount of money that is charged for life insurance can differ – sometimes substantially – from one life insurance carrier to another. This is the case even for the same type and amount of coverage. Therefore, doing some research before making a purchase could end up saving a considerable amount of money overall.
Going from one insurance carrier to another when researching premiums can be somewhat time-consuming. Therefore, making your policy and premium comparisons can typically be much easier when working in conjunction with an independent life insurance agency or brokerage that has access to a number of insurance carriers.
If you are ready to start comparing guarantee issue life insurance coverage and premiums, we can help. We work with many of the top life insurance companies that are in the marketplace today, and we can assist you with obtaining all of the key details that you will need for making a well-informed buying decision. We can do so for you very quickly, easily, and conveniently – all from your home computer – and without you having to meet in person with a life insurance agent. If you are ready to begin the process, then all you have to do is just simply fill out the form on this page.
Should you find that you still have any additional questions or concerns regarding guarantee issue life insurance coverage – or, even if you just happen to have a question about life insurance in general – please feel free to contact us directly. We can be reached via phone, toll-free, by dialing 888-430-7668.
We know that the purchase of life insurance may be somewhat challenging – especially if you have an adverse health issue, and if you have been turned down in the past for the coverage that you need. But, the good news is that by working with an expert in this area, you can get closer to the life insurance protection that you need and the peace of mind that you and your loved ones deserve. So, contact us today – we’re here to help.