Guaranteed Issue Life Insurance Basics

Posted in Life Insurance

February 27th, 2009

For your own reasons, you do not want to go through the underwriting process when applying for life insurance. The thought of an insurance professional looking into your medical, personal and family history, as well as getting a full physical examination is not your pleasant. Then guaranteed issue life insurance may be the kind of life insurance policy that may suit you best.

As long as you are under a certain age, you cannot be rejected from purchasing a guaranteed issue life insurance policy, but there are several drawbacks. You will not need to get a full medical exam, but will have to pay substantially higher premiums to take advantage of the service. Additionally, your heirs will not be entitled to the full portion of death benefits until you have been a policyholder for several years.

Guaranteed issue life insurance policies tend to be marketed to those who are in less than average health. Since no medical exam or history is required for the coverage to be granted, there are two important limitations to the coverage. One is the higher than average life insurance premium rates and the second is that the benefit maximums do not really exceed $20,000. Because of the combination of high dues and a low benefit payoff, many people end up in the position of paying more for their guaranteed issue life insurance policy then their heirs end up inheriting.

If you can get over your fear of physical examinations and a documented medical history, you should attempt to secure a general life insurance policy. Your insurance provider uses your health condition and age to determine your policy rates. If your health does not allow you to qualify for a standard life insurance policy however, a guaranteed issue life insurance policy may provide at least some coverage.