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Policy Types

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.

Reasons to consider guaranteed issue life insurance

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 and may be helpful to you as you decide what is best for you.

Despite exam 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.

How does guaranteed issue life work?

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 require the same level of underwriting information. As a result, the cost for a guaranteed life insurance policy will be higher than a policy that has been medically underwritten. That is the compromise for eliminating the medical exams and tests.

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


  • There is no required medical examination and no medical questions.
  • You can't be turned down for this type of insurance.
  • You don't have to be in perfect health to obtain coverage.


  • Premiums are typically higher.
  • The death benefit offered may be lower than with other types of life insurance.
  • Benefits are often graded, which means that payout to your beneficiaries may differ depending on how long the policy has been in force.
  • In most cases, you must fall between certain age ranges (typically between 50 and 85) to obtain this type of policy.

What is a graded death benefit?

Often, guaranteed life policies come with a graded death benefit, meaning that there is a waiting period prior for a death benefit to be issued. For example, the contract may have a waiting period of 12 months so if you were to pass away within 12 months of purchasing your policy, the life insurance company would refund your premiums to your beneficiary, but would not issue the death benefit.

What you need to know about graded benefits

In addition to the higher premiums, one of the main drawbacks to 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.

According to Investopedia, the graded death benefit policy 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

If you have a pre-existing condition, guaranteed issue life insurance is not the only option for individuals with pre-existing conditions. Policies vary by insurer, but some may insure people with chronic conditions. Learn more about your options if you are someone with a pre-existing condition

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 underwritten 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 making a decision. In fact, you may even find that undergoing the application and medical exam process is worth potentially better rates and coverage. For more information and facts about life insurance, visit the Protective 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 or its subsidiaries.

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