Many people do not have life insurance because they have health issues that prevent them from purchasing traditional life insurance. Often these folks are seniors, and find themselves late in life without life insurance to cover final expenses when the pass. Many give up and pass the costs of their funeral or burial on to their surviving loved ones. Do not despair, you do have options and it is not as expensive as you might think.
What is Guaranteed Issue Life Insurance?
Guaranteed Issue Life Insurance (GI) policies are for those who are looking to buy life insurance, but may have some challenges. If you have significant health issues, a mental illness, or are currently collecting Social Security Disability (SSDI), guaranteed issue life insurance might be your only option. It may also be the exclusive option for high-risk applicants who have been diagnosed with cancer, COPD, congestive heart failure, and other life-threatening health issues.
With guaranteed issue life insurance, a medical exam is never required and there are only a few (or sometimes not any) health questions on the application. Guaranteed issue life insurance is generally available for anyone between the ages of 45-85, and provides anywhere from $2,000 to $35,000 in coverage depending on the company and the age of the applicant. GI policies only take a few days to get approved, and they require no medical exam and have minimal underwriting guidelines.
How Does Guaranteed Issue Life Insurance Work?
Guaranteed Issue policies are very similar to traditional whole life insurance policies and contain many of the same guarantees:
- The policy will provide lifetime coverage as long as the periodic premium is paid. This means you cannot outlive your policy like you can with term coverage.
- The insurance policy cannot be canceled by the insurer for any reason other than non-payment. If you are hospitalized or in a nursing home, your policy cannot be canceled.
- Once issued, the periodic premium will never change, and is guaranteed for life.
- Since guaranteed issue policies are whole life insurance, the policy will build cash value over time that can be accessed using policy loans.
What are the Differences of Guaranteed Issue Life Insurance (GI)?
There are several important differences between guaranteed issue life insurance and traditional whole life insurance:
- Guaranteed issue policies are typically priced higher than whole life because the insurer is accepting an unknown health risk.
- Most GI policies have a waiting period of 2 to 3 years, depending on the insurance company. If the policyholder dies due to natural causes during the waiting period, the insurer will refund any premiums paid to the beneficiary. Some insurers will also pay 5 to 10 percent in addition to the refund.
- If the insured’s death is the result of an accident, the insurer will pay the full death benefit from day one.
How can I get the Best Rates for Guaranteed Issue Life Insurance?
If you have been denied traditional or even final expense life insurance because of your age or health issues, do not despair. MedicareTalk represents all of the top-rated insurance companies that offer guaranteed issue life insurance and we will shop your insurance policy with all of our carriers to find the best policy and price to fit your needs.