Guaranteed Issue Life Insurance

Many traditional term or permanent life insurance products require a process called underwriting, which evaluates your risk level to the insurance company by analyzing your age, health and other factors. Some people — especially those in poor health — may have a hard time getting approved.

Guaranteed-issue life insurance offers coverage without a medical exam or health questions and is an option for those who have been otherwise unable to obtain coverage.*

How Does Guaranteed-Issue Life Insurance Work?

Guaranteed-issue policies are usually only available to a specific age group (ages 50 to 85, as an example). They remain in effect for as long as you pay your premiums. Some other characteristics of guaranteed-issue policies include:

No medical underwriting. Guaranteed-issue policies don't require a medical exam or a health questionnaire, like other types of life insurance.
Smaller death benefits. Because there isn't extensive medical underwriting like with traditional life insurance policies, guaranteed-issue life insurance death benefits usually top out around $25,000. Some applicants may only qualify for less.
Have a graded death benefit. Guaranteed-issue policies typically feature a "graded death benefit" for an initial period of time. If you die within the first year or two of the policy, your named beneficiary may receive a return of premiums, but not the full death benefit amount.

Is a Guaranteed-Issue Plan Right for You?

It depends on your individual circumstances. Guaranteed-issue policies are typically seen as a "last resort" for individuals in poor health who can't obtain other types of life insurance. If you've tried unsuccessfully to get life insurance coverage, a guaranteed-issue plan may be a good alternative. While the death benefits are smaller, you may be able to obtain enough coverage to pay for your funeral and other final expenses (the average funeral costs about about $7,100).

Guaranteed-issue plan premiums may be expensive, however. If you're in relatively good health, it's worth exploring traditional life insurance policies. If you don't want to take a medical exam or wait several weeks for your application to be underwritten and approved, simplified-issue policies are an option. They require health questions but not a medical exam. Issuance of the policy may depend upon answers to health questions set forth in the application