Guaranteed-issue life insurance at a glance

What is guaranteed-issue life insurance?

The key difference between guaranteed-issue life insurance and other types of life insurance is that your acceptance is guaranteed regardless of your current or past health history. And, in most cases, there are no medical examinations or health questionnaires required for approval. As long as you pay your premiums, you’re covered. It’s as simple as that.

Who is guaranteed-issue life insurance for?

Those who opt for this type of coverage are typically:

• People seeking life insurance where acceptance is guaranteed
• People who don’t qualify for other types of life insurance due to pre-existing health issues
• People who are suffering from a serious health issue
• People who lost their group life insurance coverage at work when they retired and are having difficulty finding replacement coverage due to their age or health
• People with limited savings who want to help offset part of their funeral and final expenses

Are all guaranteed-issue life insurance policies the same?

No. Each insurance company has different premiums. Some policies expire when you reach a certain age, while others don't. Still other polices have premiums that increase dramatically as you age, leaving many without coverage when they need it most.

Life expectancy keeps increasing, and many people live beyond age 80—an important thing to consider if you’re looking for coverage that will protect you for a lifetime. If there’s a chance you might outlive your policy or the premiums could become too expensive over time—especially if you’re on a limited income—you should shop around for a better policy.

How do you choose guaranteed-issue life insurance?

Here are the things you should consider when choosing your insurance.

• Premiums

  Choose an insurance policy that has fixed premiums for the entire term of the contract. Your insurance should meet your needs while taking into account your ability to pay.

• Coverage

  Opt for insurance that will cover you until your death, regardless of your age. The amount of coverage must be sufficient to meet your current and future needs. Again, you need to take into account your ability to pay. Be aware that some plans provide for an automatic increase in your coverage each year, with no increase in premium.

• Security

  Make sure you choose a reliable and trustworthy insurer. Don't hesitate to ask your representative all your questions! You should also know that most life insurance policies include a right of cancellation. If you change your mind after taking out the policy, simply return it to the insurer by the deadline specified in the contract. The premium you paid will then be refunded.

• Benefits

  It is important to know now how the insurance amount will be paid out upon your death. Also find out when your estate will receive the full coverage amount. Some life insurance policies increase the benefit in case of accidental death and others offer an early benefit when a critical illness is diagnosed. Talk to your representative to learn more.

How much coverage can you buy?

Generally, guaranteed-issue life insurance is available in $5,000 increments, with $25,000 being the maximum amount of coverage available. Remember, this type of insurance is not meant to replace lost income. Most policyholders take out guaranteed-issue life insurance to cover the cost of their funeral and final expenses or to leave their loved ones a little something to remember them by.