Guaranteed issue life insurance
Summary: You can’t be turned down for a guaranteed issue life insurance policy. There are no medical exams or questions asked.
What to know: Maximum available policy amounts for guaranteed issue life insurance could be as little as $25,000 or $100,000. You’ll usually pay a lot for the convenience of having no exam or questions. These policies are generally for people over age 45 or 50, and up to age 85, who think they’d be turned down for a policy that requires a life insurance medical exam.
If you have some health issues, don’t assume you’ll be turned down for life insurance with an exam and rush into a guaranteed issue policy. Have an independent insurance agent run some quotes for you.
Graded death benefits: Guaranteed issue policies typically don’t pay out the full death benefit to beneficiaries until at least a couple years into the policy.
For example, if you die within one or two years of owning the policy, it might pay out 110% of the premiums you paid, not the full face amount of the policy. If you die due to an accident within the first two years, such as a car crash, it may pay out the full face amount. Then in year three and after it can pay out the full face amount if you die from any cause.
