In general, guaranteed life insurance plans come with a waiting period before their benefits become effective. Very rare is the guarantee of life insurance that does not require a waiting period. These policies typically function within 2 to 3 years.
The death benefit would not be paid to the beneficiary if the policyholder died before the waiting period expired. However, the insurance company could pay the beneficiary all paid premiums back plus interest.
Guaranteed issue life insurance protects people with certain health concerns and other insurance risks. It's also the most expensive type for burial insurance, costing upwards to $150 per month for a sixty-year-old. The death benefit amounts are also low, topping out at $25,000.
For the same 60 year old, a 10-year policy of life insurance with ten-fold coverage would run about $60.
Guaranteed-issue life insurance covers people who have specific health issues. This makes it the most expensive type. A 60-year-old can pay upwards $150 per month. In contrast, death benefit amounts are very low at $25,000 and $25,000.
Most guaranteed-issue insurance companies require applicants to be between 40-50 years old to apply. They won't sell any new coverage to anyone over 80.
Guaranteed Issue Life Insurance is a type whole-life insurance policy that allows for you to skip asking questions about your health and have a medical exam. It is sometimes referred to by other names such as guaranteed acceptance insurance or guaranteed life.
The price of other types of life insurance will vary depending on factors such as age, hobbies and medical conditions. Guaranteed issue life insurance policies have fixed prices that are determined by your age at the time you apply.
Guaranteed issue policies can build cash value that you can access via a loan. The amount you owe on the loan will reduce the payout to your beneficiaries if you fail to repay it before you die. The payout to your heirs will be reduced by the amount you owe, not the coverage value plus cash value.
If you are not suffering from severe health issues, buying traditional policies will likely save you significant money. A 70-year-old woman could spend $18,700 for a guaranteed-issue life insurance policy that provides $20,000 coverage. Her $20,000 policy on whole life insurance could run her around $12,400 for ten years.
