What is Guaranteed Issue Life Insurance?
Guaranteed issue life insurance is a type of permanent life insurance that offers approval without a medical exam or health questions. Eligibility is usually based on age, typically between 50 and 80 or 85, depending on the insurer.
Because acceptance is typically guaranteed within the specified eligible age range, this coverage is often used for final expenses, such as funeral costs.
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Who Should Consider It?
Guaranteed issue life insurance may be appropriate for individuals who:
- Have serious or chronic health conditions
- Have been declined for traditional life insurance
- Need a small policy to cover end-of-life expenses
Coverage Amounts and Cost
These policies generally offer $5,000 to $25,000 in coverage, though limits vary by carrier. They are not designed for income replacement or large financial needs.
Premiums are generally higher compared to other life insurance options. Since insurers do not evaluate health, they assume greater risk, which results in higher costs for lower coverage amounts.
Waiting Period
Most guaranteed issue policies include a graded death benefit period, typically lasting 2–3 years:
- Natural causes: Limited benefit (often a return of premiums plus interest)
- Accidental death: Full benefit may be paid from day one
- After the waiting period: Full death benefit is generally payable
Policy details vary, so it’s important to review the specific terms.
Is It the Right Choice?
Guaranteed issue life insurance can be a useful option if you are unable to qualify for other traditional coverage. However, if you are in moderate to good health, simplified issue or fully underwritten policies may offer more coverage at a lower cost.
Key Takeaway
Guaranteed issue life insurance provides guaranteed approval and simple access to coverage, but with higher premiums and lower benefit amounts. It is best suited for final expense planning when other life insurance options are not available.
Life Insurance Questions?
We hope that this information on Guaranteed Issue Life Insurance is useful to you.
If you’d like help reviewing your options, you can contact Empower Brokerage at (888) 539-1633 to speak with a licensed insurance professional.
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This content is for informational purposes only and should not be considered financial or insurance advice.