Buying a traditional approach to insurance can save you money unless your health is severely compromised. If a 70-year old female purchases a guaranteed issue policy of life insurance with $20,000 coverage, her monthly cost could be $18,700. She could pay $12,400 per year for $20,000 in whole-life insurance.
Most life insurance companies will issue a refund of your premiums to beneficiaries if you die within the first year of the policy. Investopedia states that this policy prevents the payment of large sums immediately for people who are seriously ill and may want to sign up for a policy in order to provide a death benefit for their loved ones.
Guaranteed life insurance waiting times prevent end-of–life applicants from cashing in too soon on the death benefits. This would cause severe financial hardship for insurance companies.
This type insurance is great for those who have health conditions that would make it prohibitive or impossible to afford life insurance.
Many guaranteed insurance companies require applicants at least to be 40 or 50 years of age to apply. No new coverage will be sold to those who are older than 80.
Let's suppose you die in the first two or three-years of your policy for any reason other that an accident. In this case, the beneficiary will receive interest and a refund for any premiums paid. While interest amounts paid to beneficiaries can vary from one company to the next, they could range between 10% to 30%. If the death is caused by an accident, such a car wreck, the policy will cover your beneficiaries up to the maximum amount, even if you purchased it recently.
Seniors and those at moderate to high risk are best served by simplified issue life insurance. An extensive medical questionnaire is required. A slightly higher coverage amount is available.
Like other types, life insurance policies, the cost of your policy can change depending on many factors, such as age, hobbies, or medical conditions. But guaranteed issue life insurance policies provide fixed prices based upon your age when you apply.
The guaranteed life waiting periods for death benefits prevent people who are close to their end of life from cashing out too early. This would place a significant financial burden on insurance companies.