What is Guaranteed Issue Life Insurance? And do You Need It?
Okay, let’s discuss the good news about guaranteed issue life insurance first. You will not have to take a physical, ever! You will not have to answer any health questions either. This may already sound like a great deal right?
Well, don’t jump too soon. Chances are, if you are looking for this type of policy that you may have a very good reason to do so. Furthermore, you would know what those reasons are. If you are not sure why you would need it – read on!
Why would you be interested in this type of policy? If you have health issues that keep you from getting a policy under normal underwriting conditions this may be your only choice. Unfortunately this WILL mean that the premiums are substantially higher. Why? The insurance company’s know that most consumers who apply for this type of coverage have a reason to do so. Meaning, there is a good chance some health issues are involved for the applicant. Which makes the odds of the policyholder passing away higher. Bringing costs for the insurance company up as well. They will have to pay out more claims per 1000 applicants than with standard underwritten healthy people.
- If you are young and healthy why would you want a guaranteed issue life policy? You may be extremely busy, do not have time to fill out an application, answer questions, and have a paramedical exam at your house, office, or in the middle of the park.
- And, you may have more money than time – this might be the policy for you.
- This type of policy could also be used for temporary purposes prior to qualifying for a full underwritten insurance policy.
- Standard underwritten policies are a fraction of the cost in comparison to guaranteed issue life insurance.
Also keep in mind that even if you have failed underwriting through one insurance company there are many others available. It may be better to contact a life insurance broker who can shop your specific needs and is very knowledgeable with underwriting requirements of different companies with whom they work with. Sometimes they can cherry pick a company that will work for you despite a health condition.
Buying a guaranteed issue policy should be used as a last resort.
But as mentioned above for some consumers, guaranteed issue life insurance are the only option available. And for that reason alone they are an important product to consider.
Guaranteed issue life insurance not what you were looking for? Other Life Policies…