Guaranteed life insurance is a policy that will not deny you due to pre-existing medical conditions. Show
However, there are significant drawbacks to consider. Additionally, for most seniors, a guaranteed acceptance policy is not the only way they can get coverage despite prior health issues. Learn how these plans work, the exclusions you need to be aware of, if you need it, the best companies, and the cost. Topics Covered in this article
What Is Guaranteed Life Insurance & How Does It Work?Guaranteed issue life insurance is a type of life insurance that comes with guaranteed approval because there are no health or lifestyle questions. Because there is no underwriting of any kind, there is a mandatory 2-3 year waiting period. Any non-accidental death during the waiting period will result in a refund of your premiums plus interest (typically 10%). In other words, your beneficiaries will not receive the full death benefit amount for death due to natural causes. Tip: No life insurance company in the USA offers guaranteed acceptance life insurance with no waiting period. Some life insurance companies will refer to the waiting period as a “graded death benefit” or “modified benefit.” After the waiting period, the total life insurance benefit would pay out at any point. Nearly all guaranteed life plans are whole life insurance. A whole life insurance policy is a type of permanent life insurance that builds cash value and has ironclad guarantees. The monthly premiums will never increase, and the coverage will never decrease or expire. Since it’s life insurance coverage, the payout will be a tax-free cash payment to your loved ones. They can use the money for funeral costs, medical bills, credit card debts, or anything else.
Do You Need A Guaranteed Issue Life Insurance Policy?All too often, seniors mistakenly assume that guaranteed life insurance is their only option due to pre-existing medical conditions. For most people, that is not the case. In fact, most applicants with previous health issues can qualify for a policy with medical questions. Tip: Please don’t assume you need a guaranteed issue life insurance plan because of your health history because you probably don’t. At Choice Mutual, over 90% of our policyholders qualified for plans with health questions, meaning they saved money and were fully covered immediately. For example, final expense policies have very lenient underwriting. Most seniors qualify for final expense coverage despite high-risk medical issues such as diabetes, high blood pressure, COPD, or previous heart attacks. Health issues where guaranteed acceptance is your only optionSome health conditions have such a low life expectancy that guaranteed acceptance coverage is your only option. You need a guaranteed life policy if you have any of the following medical issues.
If you don’t have any of the above conditions, there is a very high chance that you can qualify for coverage with underwriting (lower rates and immediate coverage). Best Guaranteed Life Insurance CompaniesMutual of Omaha and AAA are the best guaranteed acceptance life insurance companies. However, Physician’s Mutual final expense coverage is cheaper at certain ages. Companies like Gerber Life Insurance and AIG are reputable and financially sound, but their rates are much higher than most. Notable companies such as the AARP life insurance program via New York Life or Colonial Penn aren’t competitive in terms of cost. For example, check out a Colonial Penn rate chart or how much AARP final expense insurance costs relative to other insurance providers. Below is a table that outlines all the top guaranteed issue life companies.
How Much Does Guaranteed Acceptance Life Insurance For Seniors Cost?Most guaranteed acceptance policies cost about $50-$300 monthly for $10,000-$20,000 in guaranteed coverage. All life insurance quotes are based on your exact age, gender, and the amount of coverage you buy. Ordinarily, life insurance rates would also be determined by your health. But since guaranteed life insurance plans don’t ask about health history, prior medical conditions will not affect the price. The table below has some sample monthly prices.
Is Guaranteed Issue Life Insurance With No Waiting Period Real?No life insurance product (from any company) has no health questions or waiting period. A no-health questionnaire plan always has a waiting period in the first 2-3 years of the policy. No Exam Vs. No Health QuestionsIt’s essential to understand the difference between the terms “no medical exam life insurance” and “no health questions life insurance.” They do not mean the same thing.
So if you see a life insurance for seniors advertisement that only says “no medical exam,” that means it still has health questions. How To Get Life Insurance With No Waiting PeriodTo qualify for life insurance products that immediately cover you for natural causes, you must apply for a policy with underwriting. In other words, you don’t have to take a medical exam, but you will have to answer health questions. At the very least, most applicants can qualify for a senior burial life insurance policy with first-day full coverage. Medical conditions eligibilityThe table below has various health issues and whether they are eligible for a no-waiting period policy. Please remember that your age, resident state, and the totality of all your health issues may result in a different outcome.
Frequently Asked QuestionsGuaranteed issue whole life insurance is only worth buying if you have high-risk medical conditions that render you uninsurable via any other policy. You should only opt for a guaranteed issue plan after you’ve exhausted all other options that do have underwriting. All guaranteed issue plans have a minimum of a two-year waiting period. No company offers a 6, 12, or 18-month waiting period. Most guaranteed issue life insurance companies offer a maximum of $25,000 in coverage. Keep in mind that you can always buy multiple policies from different companies. The biggest downside with guaranteed issue life coverage is the waiting period and the higher premiums. All policies with no health questions have a 2-3 year waiting period. Additionally, they are typically more expensive since the insurance companies take on substantial risk not knowing about the applicant’s health. Nearly all guaranteed acceptance life insurance plans are whole life. However, a company called Protection Plus Life offers guaranteed issue term life insurance policy up to $50,000 in coverage. Guaranteed universal life is not the same as guaranteed issue life insurance. A “GUL” policy is a type of permanent life insurance with a fixed rate and death benefit. All guaranteed universal life plans have underwriting, so you must medically qualify. No company offers a guaranteed acceptance universal life product. What kind of life insurance is best for seniors?A guaranteed issue life insurance policy is often the best option for seniors in poor health. This is a type of life insurance that does not require a medical exam or answer any health questions, and you can't be turned down in any case.
What is guaranteed in a whole life policy?Whole life insurance guarantees payment of a death benefit to beneficiaries in exchange for level, regularly-due premium payments. The policy includes a savings portion, called the “cash value,” alongside the death benefit. In the savings component, interest may accumulate on a tax-deferred basis.
Does whole life have a guaranteed interest rate?Most whole life policies have a guaranteed return rate at a low percentage, but it's impossible to know how much your cash value will actually grow. That's because most insurance companies that sell whole life also offer a “non-guaranteed” return rate of return based on dividends.
What is the difference between guaranteed acceptance and permanent whole life insurance?All permanent life insurance lasts forever and has a cash value, but there are three main varieties. Whole life insurance has a guaranteed premium rate over the lifetime of the policy. Universal life insurance lets you change the death benefit, while guaranteed universal is a combination of whole and universal.
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