In the past, those who had adverse health conditions had few choices when it came to applying for life insurance. Often, unfortunately, because an individual had some pre-existing condition, they would simply be turned down for a traditionally underwritten policy.
If you’re one of those people that have been turned down for life insurance coverage in the past, or you think that you can’t be accepted for insurance coverage, think again! In just about every case, there are several affordable life insurance options for you.
Not having life insurance is one of the worst mistakes that you can make. If you think there are no options or that coverage would be too expensive, please keep reading! There are plenty of insurance options to give your family the protection they need.
If you were to pass away, your loved ones would find themselves with thousands of dollars of debt that they don’t have the money to pay off. Don’t make a difficult situation even worse by not having life insurance.
Now, however, applicants may be able to turn to graded benefit coverage. These types of policies allow individuals the opportunity to obtain the coverage that they need, as well as allowing the insurance company to “ease into” the potential risk that they are taking on with certain applicants.
Graded Death Vs. Guaranteed Issue
While there is a lot of confusion on the topic, graded death and guaranteed issue are NOT the same thing. They are very different. Graded death benefit means a policyholder wouldn’t get the full pay out within the first two years.
We believe everyone should have the chance to buy a life insurance policy they can afford. There should be nothing stopping you from protecting your family against unpaid debts.
For most people, they have plenty of options, but there are other applicants with limited choices. This article is going to walk you through one of those choices and help you decide if it’s a good option for you.
What is Graded Death Benefit Whole Life Insurance and How Does It Work?
With a graded benefit whole life policy, the amount of the death benefit in the policy is not the same amount at all times. For example, the death benefit will initially start out at a smaller amount in the early years of the policy, and then over time, the amount of the death benefit will gradually increase.
In many cases, by the fifth year of the policy, the death benefit amount will have leveled out.
Just like with other types of whole policies, a graded benefit plan will offer death benefit protection, along with a cash value component. The cash within this portion of the life insurance policy, is allowed to grow on a tax-deferred basis which means there will be no tax due on the growth of these funds until the time they are withdrawn. This can allow the cash to compound over time exponentially.
Typically, a graded benefit plan will endow by the time that the insured reaches age 100 or 120 – provided that the policy is still in force at that time. What this means is that the cash value in the policy will then be equal to the amount of the death benefit and that no additional premium payment will be due.
What is the Cost?
Because the applicants for graded death benefit policies, in general, are usually considered to present more risk to the carrier, the premiums that are charged for these plans will typically be higher than for other comparable types of coverage.
Even though the amount of the death benefit will not initially be a level amount, the premiums are the same amount throughout the life of the policy. Therefore, the policyholder can count on paying the same amount of premium over the time that they own this type of insurance plan.
Because you won’t have to go through the underwriting, you will be paying more, but you can’t put a price tag on the peace of mind knowing that your family will have the resources they need in case you were to pass away. In most cases, applicants are surprised to hear just how affordable these policies are.
Who is a Good Candidate for a Policy?
Although not everyone will be a good candidate for graded benefit policy, there are some people for which this type of policy could be the perfect fit. For example, if you have certain health-related conditions and you cannot qualify for a traditional, medically underwritten plan, then this could be another option for you to consider.
Although the premium will be higher than for a comparable “traditional” policy, the graded benefit policy could be the only available option.
As an example, if you are insulin dependent, confined to a wheelchair, or in a nursing home, a graded whole life policy may be your only choice, as well as if you have heart disease or a cognitive impairment. Also, graded benefit policies are often only offered to those who are age 50 and over.
If you fall under one of these categories, you may have already have been turned down for insurance coverage. One of the worst mistakes that you can make for your loved ones is to go without a life insurance plan.
How to Apply for a Graded Benefit Policy
In most cases, applying for a graded benefit life insurance policy is relatively easy. There are typically only a few health related questions that are required to be answered on the application for coverage. Also, unlike traditionally underwritten policies, there is no medical exam to contend with.
Therefore, you will not be required to undergo giving a blood and urine sample.
For this reason, there may be instances where even a perfectly healthy individual may consider purchasing a policy if he or she is extremely fearful of needles and would prefer not to go through the paramedical exam. (Although, in this case, it is important to keep in mind that the premium that will be charged will typically be a great deal higher than that of a traditional life insurance plan).
Another advantage to the application process of a graded benefit policy plan is how quickly you can obtain coverage. Unlike plans that require the medical exam, you won’t have to wait for weeks to take the exam and then wait several more weeks for the company to go through the results.
With these policies you’ll be able to get approved for coverage much quicker. If you don’t want to wait up to a month to get a life insurance plan, these policies are a great option.
High-Risk Life Insurance
We talk to a lot of people who think they can’t get life insurance because of their health or because of a pre-existing condition.
This isn’t always the case. It’s important you do some looking around for insurance because you settle for a graded insurance plan. You would be surprised with some of the conditions insurance companies will approve.
There are plenty of companies who like to work with high-risk clients other carriers won’t touch. Those companies can be your ticket to getting an affordable plan which isn’t graded. The key is to get connected with one of those companies.
How to Find the Best Premium Quotes
When seeking life insurance premiums of any kind, it is often best to work with an agency or a company that has access to more than just one insurance carrier. This is because you will want to be able to compare life insurance benefits, policies directly, and quotes in an unbiased manner and from there, choose the plan that will work the very best for you and your coverage needs – as well as for your budget. When doing so, we can help.
If you’re looking for the most affordable life insurance coverage, you’ll want to choose a medically underwritten policy. With a traditional term plan, you’ll have to go through the medical exam and pass the medical underwriting, but all of the time and frustration pays off with lower insurance rates.
If the insurance company has a better picture of your overall health, they are going to give you better monthly rates because they understand how much of a risk you are.
Aside from deciding which type of policy you’re going to purchase, it’s vital that you get enough coverage. Not having enough coverage can be as bad as not having coverage at all. If you don’t know how much coverage you need, there are several questions that you can ask yourself.
The first is, “how much debt do I have?” and this is one of the most important questions that you can ask. One of the main purposes that you should have in mind when looking for a plan is your debt and any unpaid expenses that you would leave to your family.
Sit down and calculate all of your debts, mortgage, car payments, credit card bills, and any other unpaid expenses that you have. All of those would be your loved ones responsibility if you passed away. Don’t forget to account for other final expenses like funeral costs or any possible medical bills that could add up thousands of dollars.
The next question you’ll want to ask is, “how many of my loved ones rely on my salary”, this is because the other goal of your policy is to help your loved ones replace your income if anything were to happen.
If you are one of the main income earners in your family, and you have several people that rely on your income for support, they would experience financial suffering if you were to pass away. Would they be able to find a way to replace that income without losing their standard of living?
We work with many great life insurance companies in the industry – and we will provide you with all of the important information you need when making an informed buying decision. We can get you all of these details conveniently from your computer, and without you ever having to leave the comfort of your home. When you’re ready to begin, all you have to do is just simply fill out the quote form on the right side of this page.