For anyone who isn’t eligible for life insurance policies because of some pre-existing condition a guarantee issue life insurance policy may be just what you were looking for. You can be automatically accepted into the policy without a physical or any explanation of pre-existing conditions which is great if you have heart disease, cancer, kidney disease etc. This is the perfect option for anyone who simply can’t qualify for traditional types of policies.
Your premiums will be higher, the insurance company either knows for a fact that you’re a higher risk, or they assume you are since you haven’t had a physical. Having to pay higher premiums isn’t ideal, but it is a better option than not having any insurance at all, which can leave you extremely vulnerable to expensive medical costs.
Guarantee issue life insurance isn’t the same thing as a regular term life insurance policy. with a term policy you can choose the length of the term, anywhere from a few years up to 30 years. With a guarantee issue policy you can only buy a 5 year term and can renew every 5 years until the age of 80. Once you turn 80 your guarantee issue policy will be converted to a permanent policy. You won’t need to have a physical at that point either.
Your rates won’t increase for you as an individual, if the overall rates increase for other holders of policies in your age range your rates will go up too, but you won’t be singled out for a rate increase. The premiums will adjust and differ according to your age, the older you are the higher the premiums will be.
Another big difference between this type of policy and a standard term life insurance policy is that the death benefits will be much lower than with a standard policy. You can buy them in increments of $5,000 and add more up to a maximum amount of $25,000. The face value of the policy will remain the same no matter how old you get or what health issues you might have.
Here are some other things that you should know about this type of policy, for one thing, the insurer can’t cancel your policy if you are diagnosed with a life threatening disease.
Also, you can get an accelerated death benefit you can use to pay end of life expenses such as medical bills or personal care. If you accelerate the payout that amount will be deducted form the death benefit amount.
At the end of the day, it’s up to you to sit down and spend some time with your insurance agent and ask questions so you fully understand all the different advantages of various types of insurance policies.
Of course, for anyone who is considering purchasing a guarantee issue life insurance policy it probably means that you were either born with a pre-existing health problem or that you’ve developed one over time, either way this insurance policy might give you some help when dealing with expensive medical bills.