Guaranteed Issue Life Insurance

Buying a life insurance plan can be easy, entailing the completion of an application for coverage (which asks about the applicant’s health condition and other key factors), and 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 run into roadblocks when qualifying for life insurance – or at least the type of life insurance which requires a medical examination and providing details about one’s health condition. Guaranteed issue life insurance can instead provide a viable solution for coverage.

What is Guaranteed Issue Life Insurance and How Does It Work?

guarantee issue life insuranceGuaranteed 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, an applicant for this type of coverage cannot be turned down for a policy.

Typically, guaranteed issue life insurance policies are a type of whole life insurance protection. They are permanent. Never ending.

As an added bonus, these plans accumulate an additional cash value.

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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.

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 is paid out to the policy’s beneficiary.

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. Getting final expense insurance will help in this case.

Just as with other types of life insurance protection, the benefits are paid out from a guaranteed 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, a guaranteed 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 which were paid into the policy – possibly with an additional amount of interest.

This is so 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).

It is always a good idea to inquire as to whether the benefits on a life insurance policy will be “graded.”

Guaranteed Issue VS Simplified Issue Coverage

It is also important to understand a guaranteed issue life insurance policy is not necessarily the same as a simplified issue life insurance policy.

A 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 Guaranteed Issue Life Insurance a Good Option for Seniors?

While there are many who may be a good candidate for guaranteed 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 which can make it more difficult to qualify for a traditional, medically underwritten life insurance policy.

While there are some people who feel a 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 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 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 guaranteed 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 Coverage Cost?

Just like with other types of life insurance coverage, there are several key variables which will be considered when determining the cost of a guaranteed 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 guaranteed 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 which will offer a higher amount of benefit on these plans.

Because the amount of coverage through guaranteed issue life insurance coverage is not usually high, the premium may not be a high amount either – and it can fit into many people’s overall budgets.

There are many of today’s top life insurance companies which offer a guaranteed issue life insurance option, including AIG, New York Life, Gerber Life Insurance Company, State Farm, John Hancock, and Protective Life Insurance Company.

Because there can be many different options in terms of coverage amount and premium sizes, it is essential to do a thorough comparison of different policies and premium charges before moving forward with a purchase.

Who Should Consider a Policy?

There are several potential candidates who may want to consider a guaranteed issue plan, based on their age and/or their overall health condition. Guaranteed 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.

Those who may have certain serious health issues such as cancer or heart disease could be good candidates for guaranteed 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 guaranteed 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 guaranteed issue policy will typically be higher than a medically underwritten option – with all other factors being equal).

3 Questions to Ask Yourself Before Buying a Guaranteed Issue Life Insurance Policy

How Much Coverage Do I Need?

guaranteed acceptance life insuranceAside from buying life insurance, the next most important thing that you can do is ensure that you have enough protection for your family.

Not having enough protection for your loved ones is ones of the worst mistakes that you could ever make for your loved ones.

If something tragic were to happen to you, your family would be left with additional expenses and leftover bills.

One of the main disadvantages of guaranteed life insurance plans is that you’re going to be severely limited on how much insurance that you can buy for your family.

Most insurance companies are only going to sell you around $25,000 worth of protection. For most families, this isn’t going to be enough coverage.

Before you purchase any plan, take the time to calculate how much life insurance your family will need. There are several key categories that you will need to account for to ensure that your loved ones have enough life insurance.

Two of the main things are your debts and your salary. More than likely, you’re going to need more than guaranteed acceptance insurance will offer.

Do I Have Any More Options?

The next question is about your other life insurance options. There is nothing wrong with a guaranteed acceptance plan, but they shouldn’t be your first choice.

In fact, they should be your last resort for insurance coverage.

If your application has been rejected in the past, there are still some possibilities that you can get a traditional plan. There is a good chance that you simply applied with the wrong company.

Every insurance company is different, and all of them are going to have different medical underwriting, which means they are going to view your application through a different lens.

There are certain carriers who don’t want high-risk applicants, while others are okay with it.

How Much Do I Want to Spend?

One of the most important questions that you should ask yourself is about your budget and how much you can comfortably spend on your life insurance.

With a guaranteed issue life insurance policy, the plan is going to be more expensive for an insurance dollar (source). You’re going to spend more for a $25,000 guaranteed issue plan than you would for a small traditional insurance policy.

If you want to get the most affordable life insurance policy, then you need to apply for a traditional policy.

Where to Find the Best Premium Rates on a Guaranteed Issue Life Insurance Plan

With most guaranteed issue life insurance policies, the only stipulation for coverage acceptance is payment of the premium. 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 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.


Susan Wright, CLU, ChFC, RHU, REBC, ADPA, CITRMS, CIPA has been in the insurance and financial field for over 27 years. Even with years of experience, she continues to create new resources for others. Everything from books to training material.

Susan received her MBA from St. Louis University and her BA from Michigan State University.

She has worked in several areas but excels in writing material for both finances and insurance. Her goal is to give professionals credibility and assist in streamlining the sales process.

She has written countless articles for a variety of websites.

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