Life insurance is one of the most important purchases that you’ll ever make for the future of your family. There are dozens of different factors that you’ll have to consider when trying to find the perfect policy to protect your family.
If you have health complications or any pre-existing conditions, it could be difficult to get the life insurance that your family needs. Regardless of your health, you should be able to purchase an affordable and quality life insurance policy. Even if you have severe health problems, there are plenty of options available to you for life insurance.
In fact, even if you’ve been rejected in the past for a life insurance plan, don’t think you can’t get life insurance. That couldn’t be further from the truth. There are still several options for you to choose from and guaranteed issue life insurance is one of those.
Most of us have heard about guaranteed issue life insurance but still wonder, “What is guaranteed issue life insurance?” If you watch television, then you have seen more than one commercial about guaranteed acceptance life insurance policies that require no medical exam and no health questions. Fans of Jeopardy may know that longtime host Alex Trebek has appeared as a spokesperson in commercials for Colonial Penn guaranteed acceptance life insurance policies for many years.
It is true. Guaranteed issue life insurance policies are issued to anyone, regardless of their state of health. Even if you have been told that you aren’t insurable or if you have been declined in the past, you will be approved for guaranteed issue life insurance.
Talk to us at Ogletree Financial Services. We have secured fully underwritten life insurance for clients who have previously been declined many times. Guaranteed issue may or may not be the best option for you. Give us call at 1-800-712-8519 and find out what we can do for you.
Getting guaranteed issue life insurance is easy and fast. Many times approval takes just a few days. A fully underwritten policy may take a month or even two to be approved.
This is not simplified issue life insurance which does not require a health exam, but does require clients to answer a few health questions to be approved:
- Are you living in a facility such as a nursing home?
- Have you been diagnosed with a serious illness like cancer or diabetes in the last two years?
- Do you have heart disease?
- Do you have HIV?
- Have you had a stroke?
- Do you have kidney disease?
- Do you have any cognitive impairments?
Some life insurance companies may only require you to answer two or three questions to get a simplified issue policy. Guaranteed issue policies require no medical exam or health questions. Anyone with any health concern will be approved.
So, is guaranteed life insurance a good idea or a bad idea? It’s certainly easy to get. But why is it often considered solely a final life insurance option for those who have been repeatedly declined for regular underwritten life insurance?
What Is Guaranteed Issue Life Insurance?
The first thing you need to know, and probably have already guessed, is that the premiums for guaranteed issue life insurance are higher than for fully underwritten policies. In addition to being more expensive, guaranteed issue policies also come with a few conditions.
One limitation of guaranteed issue life insurance is what is known as a ‘graded benefit’. For two years after you purchase your policy, your beneficiaries will only receive your premiums and accrued interest as a death benefit. This policy clause has been designed to prevent clients from purchasing life insurance knowing that they will soon die. Guaranteed issue insurance would not be possible without this limitation in place.
This period of protection for the life insurance companies means that if you are going to get a guaranteed issue policy, it is very important to act now. The sooner your policy is in place; the sooner the two-year waiting period will pass and your family will have the fully protected financial future you desire.
Another condition of guaranteed issue life insurance is the lower face values life insurance companies offer on these policies. Often these policies have face values of $25,000 and sometimes less. The reason a client has turned to a guaranteed issue policy is often to cover final expenses in the unfortunate event of their passing. They are primarily buying life insurance to assure that their loved ones will not have to worry about funeral expenses, burial costs and outstanding debt when they die.
Also, insurers tend to reserve these policies for older clients. Insurance companies often limit guaranteed life insurance to clients in a certain age range, typically 50 to 85, but this will vary from company to company.
There are other reasons that clients with impaired risk have been turned down for fully underwritten life insurance and choose to buy a guaranteed issue policy. Extreme obesity, high risk occupations, high risk hobbies, heavy cigarette habits and previous denials for life insurance can all push clients toward guaranteed issue life insurance.
Certainly, a majority of clients purchasing guaranteed issue life insurance do so because their health is preventing them from being approved for a fully underwritten policy. Guaranteed issue life insurance is a very good option for those that have these large health risks. The price will be higher than the other policy options, but if you are facing a major health crisis and you must get a life insurance policy in place, guaranteed issue life insurance could be your best option to get the coverage you need.
There are a few disadvantages to these plans that you should be aware of when you’re shopping for life insurance protection for your family. The biggest disadvantage of these plans is that they are going to be more expensive type of coverage that you can buy. With a normal life insurance plan, the insurance company gets an idea of your health and how much of a risk you are to insure. With one of these guaranteed issue policies, the company doesn’t get that information, which means they are taking a higher risk. They are going to offset that risk by charging you more every month. If you want to get the most affordable life insurance plan, this isn’t going to be the option for you.
Another pitfall of one of these plans is that the insurance company is going to limit you on how much coverage that you can buy with a guaranteed issue life insurance policy. Some insurance companies are going to cap your coverage limits at $25,000 with a guaranteed issue policy. For most applicants, this isn’t enough coverage for their family. If you want more coverage than this, you will have to purchase two plans, or apply for a traditional policy that requires that you take a medical exam.
Which leads us to the next point, how much life insurance coverage do you need to apply for? How do you know if these guaranteed issue policies are enough coverage for you and your family?
There are several different factors that you’ll need to account for when calculating your life insurance needs are. The first thing that you should look at is your debts and final expenses that you would leave to your loved ones. The primary goal of your life insurance is to give your family the money that they need If you were to pass away, your family would be responsible for you mortgage payments, car loans, and much more. All of those can make an already difficult situation a thousand times worse.
The next factor that you should account for is your paycheck. If you’re one of the main income earners in your household, your family would suffer financially if you were to pass away. The secondary goal of your life insurance plan is to give your loved ones the money that they need to replace your income without sacrificing their standard of living.
After you add up all these factors, you’ll be able to calculate how much life insurance that you need for your family. If something tragic were to happen to you, all of those expenses would go directly to your family. It can leave them under a mountain of debt.
If you’re worried about not having enough life insurance coverage, it’s always better to have more coverage than not enough. If you have any questions about calculating your family’s insurance needs, feel free to contact us. We can walk you through all of the numbers you’ll need to add up to ensure they will have enough money.
You have decided that protecting your family’s financial future is a priority. Don’t let difficulties in the underwriting process keep you from accomplishing this goal. Guaranteed issue life insurance could be the ticket to the peace of mind you desire.
You can count on Ogletree Financial Services to get you the life insurance you need at the lowest premium possible. The savings could be thousands of dollars. Whether you will qualify for a fully underwritten policy or you will be seeking a guaranteed issue policy to meet your life insurance needs, let us guide you in this important life decision. Don’t just listen to the advice of someone with a big name such as Dave Ramsey or Suze Orman on life insurance, we are here to help you personally! The future financial security of those you hold most dear is at stake.
Our agents know shopping for life insurance is not a fun way to spend your evening. It can be a morbid topic, but it’s one of the most important purchases you can most to protect your family against the unknown future.
If you’ve been avoiding buying life insurance because you think it’s going to be difficult or too expensive, we promise, it doesn’t have to be either. We can get you a life insurance you can afford and we can do it quickly.
Let us help you today! Getting started is easy.
- Call 1-800-712-8519
- Use the free quote application on this page
- Leave us a message on our contact page
Frequently Asked Questions
Guaranteed issue life insurance policies are issued to anyone, regardless of their state of health. Even if you have been told that you aren’t insurable or if you have been declined in the past, you will be approved for guaranteed issue life insurance.
Guaranteed Issue Life insurance has higher premiums and lower caps on the face amount. Companies that sell guaranteed issue life insurance do not know the client’s health and therefore charge the higher premiums to offset the risk of the unknown.
If you’re worried about not having enough life insurance coverage, it’s always better to have more coverage than not enough. If you have any questions about calculating your family’s insurance needs, feel free to contact us. Ogletree Financial Services can walk you through all of the numbers you’ll need to add up to ensure they will have enough money.