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What is guaranteed issue life insurance?

This article gives quick facts about guaranteed issue life insurance, a policy you are guaranteed to be approved for, and discusses the advantages and disadvantages to this type of policy.

Does the thought of getting a medical exam to qualify for life insurance make you anxious? You're not alone. For some people, the life insurance application process and medical exams can be stressful. The anxiety of having their blood drawn and going through a paramedical examination may be enough to keep them from getting the coverage they need. This article discusses guaranteed issue life insurance, a type of insurance that Protective does not currently offer, because we want to provide you with information that may be helpful to you while you are deciding what is best for you.

Despite these worries, life insurance is important and the decision to get protection should not be postponed. If you've been procrastinating due to anxiety over the process, guaranteed issue life insurance could be an option.

As the name implies, there are life insurance policies that are guaranteed to be issued. That means regardless of your health, you cannot be declined or turned down. However, guaranteed issue life insurance generally offers low death benefit options with higher than normal premiums.

The three main benefits of guaranteed issue life insurance are that there is no required medical examination, no medical questions to answer, and you don't have to be in perfect health. However, because you do not have to qualify, premiums are typically higher than what a healthy person would pay for the same amount of coverage under a policy that went through medical underwriting.

How does a guaranteed issue life insurance policy compare to other life insurance policies?

Most life insurance policies require some type of medical underwriting. Medical underwriting uses the results of exams, blood tests, pharmacy history and more, to evaluate the applicant's health status. An underwriter, experienced in health conditions and interpreting results, will make a determination to approve or decline the application for insurance. The underwriter also assigns a rating class that determines how much premium the applicant will pay for the insurance. Medical underwriting allows consumers to pay premiums that are appropriate for their health status. Healthy people typically pay less than unhealthy people.

Guaranteed issue policies do not provide the same level of underwriting information. As a result, the cost for a guaranteed life insurance policy may be higher than a policy that has been medically underwritten. That is the compromise for eliminating the medical exams and tests.

Most life insurance policies can be for amounts of insurance of one million dollars or more. Guaranteed issue policies however, limit the amount of insurance often to $50,000 or possibly $100,000.

What you need to know about graded benefits

In addition to the higher premiums, one of the main drawbacks to a guaranteed issue life insurance is that your beneficiaries wouldn't receive a full death benefit until your policy has been in force for a specific length of time (typically between one or two years, depending on the life insurance company). In the insurance industry, this is known as graded benefits.

If you were to die during the first few years of the policy, most life insurance companies will generally issue a refund of your premiums to your beneficiaries in lieu of the actual death benefit. According to Investopedia, this practice prevents immediate large payouts for critically ill individuals who may wish to sign up for a policy just in time for their loved ones to receive a death benefit.1

Guaranteed issue life insurance quick facts:

  • Policies are typically meant to pay for final expenses (funeral and burial costs)
  • Policies are generally considered an only option or “last resort” life insurance
  • Policies offer smaller death benefit amounts compared to most life insurance policies
  • Most people who apply for guaranteed issue life insurance are generally not in good health and may have been denied coverage at one time
  • Because the life insurance company can't determine through a medical exam or questions the extent of your health (how healthy or how ill you are) you should expect to receive higher than normal rate quotes

No matter what your reason for considering guaranteed issue life insurance may be, it's always a good idea to get at least three quotes from various reputable life insurers before make a decision. In fact, you may even find that undergoing the application and medical exam process is worth your while to secure better rates and coverage. For more information and facts about life insurance, visit the Protective Life Insurance Learning Center, or get a term life quote today.






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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit

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