People buy life insurance coverage for many reasons. These may include replacing their income so that loved ones don’t have to struggle, paying off large debts such as a mortgage or credit card balances, reducing or eliminating estate taxes, pre-paying future costs such as a child’s college education, or providing liquidity to a business to keep it afloat until a replacement can be found.
One of the key reasons that people purchase life insurance, however, is for paying funeral costs and other final expenses. Today, when factoring in a burial plot, casket, flowers, and the funeral service itself, the average cost of a funeral can now run in excess of $10,000.
Typically, these costs can be covered by life insurance. The funds from a life insurance policy can keep a surviving spouse or other loved ones from having to dip into savings in order to pay such expenses. Unfortunately, though, many seniors who are aware of these costs and want to purchase life insurance to cover them, are unable to qualify for coverage due to poor health.
There is good news, though. With guaranteed life insurance, even an individual who was previously turned down for life insurance coverage in the past, can be accepted for coverage. This type of insurance can allow a person to obtain the financial protection that they need to cover the cost of final expenses, as well as other expenses that they see fit.
Today, seniors, those with adverse health conditions, and smokers who may not otherwise qualify for other types of life insurance, can obtain the financial protection that they need and are no longer considered “uninsured.”
How Guaranteed Life Insurance Works
A guaranteed policy can be issued to an individual – regardless of the condition of their health. In many ways, this type of coverage can be thought of as life insurance of last resort. It can essentially provide peace of mind to those who have been denied for coverage by other carriers.
As its name implies, an applicant is guaranteed to be approved for life insurance coverage. There are no medical exams performed as a part of the underwriting process, nor are any tests performed. Likewise, no medical history is required from the applicant’s physician to be reviewed by the insurance company’s underwriters.
With a guaranteed issue life insurance policy, the applicant simply applies for the coverage, and they are approved almost immediately. Because of this, many policies are issued within minutes, rather than days, weeks, or even months.
In many ways, guaranteed life insurance works the same as any other type of life insurance coverage. It can be purchased either as a term or a whole life insurance policy. With term life insurance, the insured will get pure life insurance protection. Here, in return for a regular premium payment, a beneficiary (or beneficiaries) will receive a set amount of death benefit if the insured dies while the policy is in force.
Term life insurance is in force for a stated number of years. These plans can usually run anywhere from between 1 year up to 30 years. Once a term life insurance policy expires, however, the insured will need to purchase a new plan in order to remain insured. At that time, the insured will need to re-qualify for insurance at his or her then-current age and health status. Therefore, the premium on their new life insurance policy will likely be higher than on the previous one.
With a permanent life insurance policy, the insured will be purchasing both death benefit protection, as well as cash value. Here, they will be able to build up tax-deferred savings – especially if they have the policy for a number of years. This cash can be withdrawn or borrowed at any time for any need that the policy holder sees fit. However, any unpaid balance of cash will be deducted against the death benefit.
Comparing with Traditional Policies
Even though they are similar in many ways, there are some differences between traditional life insurance policies and guaranteed plans. For example, due to the fact that a guaranteed issue policy will generally cover an insured who has health issues, insurance companies will typically be taking on more of a risk with these particular insureds.
Therefore, the amount of death benefit that is offered on these policies is usually low. In many cases, the death benefit will be between $5,000 and $50,000 on a guaranteed policy. However, there are some plans that offer higher amounts of coverage.
Also, there is oftentimes a waiting period before the death benefit is paid out to the policy beneficiary. For example, should the insured pass away within the first two years that the policy is in force, the beneficiary (or beneficiaries) may only receive back a refund of the premium instead of the full death benefit amount.
Applying for Coverage
In applying for guaranteed coverage, there are usually just basic questions that are asked of the applicant. These include questions about your:
- Height, as it relates to your weight
- Smoking status / tobacco usage
Unlike traditionally underwritten life insurance policies, there is no medical exam required with guaranteed issue insurance. Therefore, no blood and urine sample will be necessary for review. Because of this, applicants are usually approved for this type of coverage very quickly.
Due to no medical exam and ease of qualification, though, the premium that is charged for guaranteed life insurance will be higher than for traditionally underwritten plans. This is due to the increased risk that the life insurer is taking on with the insured. Given this, it is recommended that applicants for this type of coverage compare the premiums from several insurance companies prior to making a decision on a policy, as premiums among carriers can differ significantly.
When to Find Guaranteed Issue Life Insurance Coverage
Having a life insurance policy to cover the cost of final expenses, as well as any other debts that you may have, can be the best gift you can give to your loved ones. Ensuring that your spouse and family don’t struggle financially can offer peace of mind to all – and guaranteed acceptance life insurance can provide that.
If you are in need of life insurance coverage and you want to compare the best premium prices, we can help. We work with many of the top rated life insurance companies in the country and can help you to compare policy benefits and premium quotes. Because we work with a number of insurers, we can help to match you with the right carrier for your specific needs, as well as your premium budget.
In order to get the process started, just use the form on this page and we will send you quotes from the best life insurance companies. In addition, should you have any questions regarding guaranteed life insurance policies, premiums, or coverage in general, we can help with that, too. Please feel free to contact us toll-free at 855-900-5433 and we will be happy to help.