Is it Worth Buying Guaranteed Life Insurance?
Guaranteed Issue Life Insurance, known also as Guaranteed Acceptance Life Insurance, comes with unique benefits, such as not having to take a medical exam before being approved for life insurance coverage. But is it actually worth the price?
When applying for life insurance, you may find that medical exams and questions about your health can become very overwhelming. After all, you’re just trying to protect yourself and your family, and often just getting a straight answer can be hard.
Many of today’s popular insurance companies offer something called guaranteed acceptance life insurance , where you can have life insurance with no medical exams or health questions asked — provided that you are willing to pay the premiums. Since the costs are typically higher, is it actually worth the price?
Guaranteed Acceptance Life Insurance: What is it?
If you can afford the premiums, guaranteed issue life insurance means that your benefits are always guaranteed as long as you continue to make your monthly or annual payments. This type of guaranteed life insurance for seniors and people with an illness comes with no term or expiration date, though it usually requires you to maintain your policy for a minimum of two years before the death benefits are eligible to be issued. Not to be confused with an Accidental Death policy which only pays out the death benefit if there is an accident (regardless of premiums paid), Guaranteed Life Insurance pays regardless of the reason of death.
Like any insurance policy, a guaranteed acceptance policy will require you to make sure your premiums are paid, or monthly or annual payments that keep your policy active based on the terms between you and the insurance provider. Your beneficiary, or the person whom you chose to receive your benefits, will be able to collect on your guaranteed acceptance life insurance upon your passing. They may use this for relieving the burden of your final expenses or as a cash benefit.
Where Can I Buy Guaranteed Life Insurance?
There are many trusted insurance companies that offer this type of life insurance, and they often promote it alongside their more popular insurance packages. These include Gerber guaranteed life insurance, AIG guaranteed issue life insurance, Mutual Of Omaha Guaranteed Issue Life Insurance, Colonial Penn, and more. You may also find that applying for coverage with no waiting period is a tempting offer when discussing the options available to you with your agent. You can search through over 300 Insurance carriers including the ones listed above HERE.
How Do I Buy Guaranteed Life Insurance?
To buy guaranteed life insurance, you’ll have to get in touch with your life insurance company of choice or get a quote here. You should be able to get an online quote quickly and without a hassle, which usually just involves providing your age, sex and the state in which you live. Because of the limited requirements, most companies that offer this product give you the opportunity to get a life insurance quote online by simply entering your information and getting a quote on the spot. You may also choose to visit a life insurance company office in person and speak directly with a local agent to learn more about different life insurance types, the costs, and its benefits to you.
The Benefits of Guaranteed Life Insurance
Guaranteed Acceptance life insurance is a very straightforward policy that offers unique benefits which may be helpful to seniors or those with serious health issues. In many cases, these factors can prevent people from qualifying for guaranteed term life insurance or other packages that are usually preferred and come with stronger overall benefits.
With guaranteed insurance coverage, there are no medical exams involved and you are guaranteed benefits as long as you continue to pay the premiums. This type of insurance goes into effect faster than many other policies and makes sense if you are unable to qualify for term life insurance but still need the benefits to cover funeral costs or other expenses. Guaranteed issue life insurance typically pays out no more than $35,000-$40,000 and may be a good decision if you have a serious illness or are otherwise elderly and have no savings to pay for final expenses and would like to save your family the burden and expenses after your death.
Since guaranteed acceptance life insurance is such a straightforward policy with limited benefits, it may not be the most ideal choice for many people. When deciding if this package is right for you, it’s a good idea to consider the pros and cons as well as other possible options available to you.
One of the first things you’ll probably notice when considering this type of life insurance is the cost. Online life insurance quotes reveal that this type of insurance may be the most expensive available and the premiums could cost as much as $200 per month or more. If you are looking to only cover burial expenses, this type life of insurance coverage may not be the best option. That’s because funeral insurance is designed to cover the expenses of your funeral and is usually available at a lower cost.
Compared to other life insurance policies, guaranteed issue life insurance offers very limited benefits considering the high premiums. While some policies my offer death benefits up to $40,000, the majority of policyholders choose a benefit of anywhere from $3,000 to $15,000 depending on the terms of their insurance.
Guaranteed issue life insurance may also come with graded benefits, which can affect your coverage if you pass away within a specified amount of time, usually about 2 years from the time that your policy goes into effect. With graded benefits, you may not receive your full death benefits until after the graded period and will effectively receive a full refund of all of your insurance premiums that you paid up to that date. This could prevent an elderly or very ill person from receiving the life insurance they were looking for and should be considered in relation to life expectancy and the terms of the insurance policy.
When applying for certain life insurance, you will be asked a series of questions which are often referred to as “knockout” questions. These questions will determine your eligibility, and if you answer yes to any of them, you might not be eligible for certain types of guaranteed issue life insurance. These include questions such as if you have AIDS or HIV, live in a nursing home, or are terminally ill. If you answer no to all of the “knockout” questions, you should be eligible for guaranteed acceptance life insurance, and you can keep your policy regardless of whether your status changes or not after you are approved – just keep the premiums paid and up to date..
Guaranteed Term Life Insurance
Lastly, depending on your health and age you may qualify for something called Guaranteed Term Life Insurance. Guaranteed Term life insurance is a traditional form of life insurance whereby policyholders are guaranteed insurance coverage within the specified time period—or term—that they have purchased. When the term expires, you may choose to renew your policy, get permanent coverage or end your agreement with the insurance company. This type of insurance is usually best for people under 65 with a healthy background.
The Downside of Guaranteed Life Insurance
Often considered a ‘last resort’ insurance coverage, guaranteed acceptance life insurance should only be considered if you are unable to qualify for better life insurance policies such as term life insurance and simplified issue life insurance. If you’re under 65, you are much more likely to qualify for a policy that offers higher benefits at lower rates. Another important thing to consider is that these types of life insurance often has graded benefits, so if you do not expect to live for up to 2 years, this type of insurance will effectively refund your premiums at the time of your death should it occur before the term set by the insurance provider has passed.
If your biggest concern is to cover your final expenses (also called end-of-life expenses), then a product such as funeral insurance or pre-payment is sometimes a good option. However, guaranteed life insurance may work well if you would like your beneficiary to receive a small inheritance or have flexibility over your funeral arrangements and how much they should cost.
Also, if customer service is important to you or are not sure of which type of life insurance is best for you, then it would be good to speak to a licensed and independent life insurance agent that understands how all the different insurance companies assess your status, and for which type of insurance coverage you may be qualified for.