41 percent of Americans do not have life insurance. Because our health tends to deteriorate as we age and given that one’s health is among the biggest factors that affects life insurance rates, one might think that it’s too late for them to find a life insurance policy they can afford. Guaranteed issue life insurance.
There are a number of life insurance options you can consider, however. Guaranteed issue life insurance is a type of policy designed specifically for those who, because of their health, may have difficulty gaining approval for a more basic type of life insurance policy. Guaranteed issue (or “guaranteed acceptance”) life insurance is unique in that it does not require an applicant to undergo a physical examination or answer health questions for approval.
Guaranteed issue life insurance is attainable for those who otherwise would not be approved for a plan under traditional life insurance with medical underwriting protocols. Below are five facts to help you better understand this type of life insurance.
It’s not to be confused with simplified issue life insurance.
Simplified issue life insurance does not require a medical exam as part of the application process, but it does require you to answer a series of questions about your health. Guaranteed issue life insurance does not typically require either.
Which life insurance
It’s designed with smaller needs in mind.
The death benefits tied to a guaranteed issue life insurance policy are typically capped at a number quite a bit lower than some other life insurance policies. Guaranteed issue life insurance is designed not to leave your loved ones with a fortune but to leave them with enough to pay for a proper funeral and other end-of-life expenses.
Individuals with life-shortening pre-existing conditions can still be approved.
Health conditions such as ALS, Leukemia or Parkinson’s disease could rule out qualification for some types of life insurance policies. But because there are no health questions and no medical exam requirements for guaranteed issue life insurance, even individuals with life-threatening conditions may be able to get coverage.
You might pay more — or less — for it
Generally speaking, guaranteed issue life insurance will cost a bit more than some other traditional types of life insurance because of the increased risk factor taken on by the insurer. Sometimes even policies with strict underwriting guidelines can still offer a more competitive rate than a guaranteed issue policy.
In other words, take the time to shop around before committing to a plan of any particular type.
An AIG-appointed insurance agent can help you gather quotes and application information for many types of life insurance and can help you find the plan that makes the most sense for your situation. Call 1-888-428-8870 to get started.
Life insurance ownership in the U.S. 2017, Statista 2018.
Life assurance policy