Guaranteed issue life insurance

Guaranteed issue life insurance is a type of whole life insurance that offers near-certain approval and doesn't require a medical exam or medical questionnaire to apply.

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Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

&Rebecca Shoenthal

Rebecca Shoenthal

Editor & Licensed Life Insurance Expert

Rebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

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Maria Filindras

Maria Filindras

Financial Advisor

Maria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

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Guaranteed issue life insurance belongs to a category of policies called burial insurance. It’s permanent coverage that's best for people between age 45 and 80 and those who can’t qualify for a standard life insurance policy due to a serious medical condition or terminal illness. 

Unlike term or whole life insurance, the application for guaranteed issue life insurance doesn’t involve health questions or a medical exam. It has a small death benefit, which is meant to help your family cover your funeral costs or medical bills.

Key Takeaways

  • Guaranteed issue life insurance is a last-resort life insurance option if you are unable to qualify for other types of insurance.

  • Application acceptance is near-guaranteed.

  • You may be denied if you do not meet the age, state of residency, or citizenship status requirements.

How does guaranteed issue life insurance work?

Guaranteed issue life insurance works differently than other types of life insurance. Here’s where it differs most:

  • Application: Only a basic application is required — no medical exam, health questions, or waiting period.

  • Approval: Nearly all applicants are approved.

  • Cash value: Unlike whole life insurance, guaranteed issue doesn't always come with a cash value.

  • Coverage limits: The maximum amount payable to your beneficiary when you die is usually $25,000.

  • Graded death benefit: Some guaranteed issue life insurance policies require you to hold the policy for at least two years before it will pay the full death benefit

If your policy has a graded benefit and you die by natural causes in the first two years of your coverage, your beneficiaries are refunded 110% of the premiums you’ve paid into the policy. Your beneficiaries get a 100% refund if you die by suicide or due to an accident within the first two years of coverage. So if you paid $100 in premiums, your beneficiaries would get $100 to $110, depending on cause of death.

What’s the difference between guaranteed issue and simplified issue life insurance?

Guaranteed issue and simplified issue life insurance are both types of burial insurance. However, guaranteed issue insurance is better for seniors or people who don’t qualify for any other type of life insurance because almost no one is turned down.

Simplified issue life insurance is best for seniors or people who can’t qualify for a traditional life insurance policy, but who are only a moderate health risk. A detailed medical questionnaire is required and slightly higher coverage amounts are available.

How much does guaranteed issue life insurance cost?

With other types of life insurance, the price of your policy will change depending on variables like age, hobbies, and medical conditions. However, guaranteed issue life insurance policies offer fixed prices based on your age when you apply.

Take a look at the sample rates below.

AgeSex   $5,000 $10,000$15,000$20,000$25,000 
60 Female$27.97 $53.93 $79.90 $118.96$148.20
   Male  $35.07 $68.14 $101.21$149.25$186.07 
70 Female$41.21 $80.41 $119.62$176.74$220.43
   Male  $54.00 $106.00$158.00$232.60$290.25 
80 Female$95.77 $189.53$283.30$410.63$512.78
   Male  $104.16$206.32$308.48$415.67$519.08 

Methodology: Sample rates are for males and females buying a guaranteed issue life insurance policy from AIG policies in March 2022 and may vary by insurer, term, coverage amount, health class, and state. Not all policies are available in all states.

Because guaranteed issue life insurance covers high-risk people, it’s the most expensive type of burial insurance — upwards of $150 per month for a 60-year-old. Meanwhile, the death benefit amounts are low — topping off at $25,000.

In comparison, a 10-year term life insurance policy with 10 times the coverage would cost about $60 for the same 60-year-old.

Pros and cons of guaranteed issue life insurance

A guaranteed issue policy is ideal if you don’t qualify for a traditional life insurance policy. With few exceptions, you’re guaranteed acceptance and some financial support for your loved ones if you die. However, if you can qualify, other types of life insurance offer cheaper coverage and higher benefits than guaranteed issue life insurance.

Pros of guaranteed issue whole life insurance

  • Fast, near-guaranteed approval  

  • Provides financial support to your beneficiaries

  • No medical exam required  

Cons of guaranteed issue whole life insurance

  • Can be denied if you do not meet product requirements, such as age, state of residency, or citizenship status

  • Much more expensive than traditional life insurance

  • Payouts are lower than traditional policies 

  • Graded death benefits if you die in the first two years 

How to buy guaranteed issue life insurance insurance

Buying guaranteed issue insurance usually requires a phone call and an application. After submitting your application, an agent may contact you to confirm you have no disqualifying conditions and that you’re buying the right amount of coverage. 

Once you submit your application, you’ll receive a decision quickly, since there isn’t a medical exam or other reports for the insurer to consider. Your policy is in force as soon as you sign and return your policy and pay your first premium. A Policygenius agent can help you with the process.

→ Learn more about how to buy life insurance

Which companies sell guaranteed issue life insurance?

Guaranteed issue life insurance is one of the many products offered by well-known and trusted insurance companies. Both AIG and Mutual of Omaha offer guaranteed issue policies through the Policygenius marketplace.

→ Check out our top-rated life insurance companies

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Alternatives to guaranteed issue life insurance

Guaranteed issue life insurance should be a last resort. Choose one of the more affordable insurance alternatives we’ve listed below if you qualify.

Term life insurance

If you are under the age of 65, there is a good chance that you can qualify for some sort of term life insurance policy.

Even if you’re rejected from one term life insurance company, it doesn't mean that you won’t qualify for term life coverage from another company. Each company has their own underwriting guidelines and view health conditions very differently.

→ Learn more about term life insurance

Simplified issue life insurance

Simplified issue life insurance is a less expensive final expense insurance option than guaranteed issue life insurance. You have to answer medical questions to qualify, but simplified issue life insurance offers higher coverage amounts.

→ Learn more about simplified issue life insurance

Funeral insurance

Funerals can cost your loved ones upward of $7,000. To mitigate those costs, there is special funeral insurance (a type of final expense life insurance) that is primarily sold by funeral homes or funeral directors.

This should be considered a last-resort alternative to life insurance. The death benefit usually covers specific services that you pick out in advance with the funeral director. Because you’re buying this insurance in advance, you can often lock in prices for services at their current rate. If the price increases before your death, your estate or family will not have to pay the difference.

Pre-need funeral home contracts

Your other last-resort option is pre-need life insurance with a funeral home. You pick out the services you want ahead of time with your funeral director, but instead of buying a life insurance policy, your monthly payment goes directly towards paying for your future funeral. If you die before you’ve paid for the services in full, your family or estate will be expected to pay the difference.

We don’t recommend this product in most cases. If the funeral home goes bankrupt, you’d lose all your money paid and your beneficiaries would still have to pay for your funeral costs.

Is guaranteed issue life insurance worth it?

Guaranteed issue life insurance makes sense if you have exhausted all other life insurance options. In almost all cases, you’d be better off with a more traditional life insurance product if you’re looking for a policy that will help your family pay for your final expenses. 

When you’re shopping for life insurance, talk to a licensed and independent agent or broker who can help choose from your full array of options.

Frequently asked questions

What is a guaranteed issue life insurance policy?

Guaranteed issue is a type of whole life insurance where applicants are almost certain to receive approval for a policy. There is no medical exam or medical questionnaire.

What is the difference between a guaranteed and non-guaranteed life insurance policy?

Other life insurance policies that are not guaranteed issue usually require a medical exam and review of your hobbies, finances, and lifestyle to apply. Guaranteed issue skips these steps. However, non-guaranteed policies are more affordable and provide more coverage.

How much does a guaranteed issue policy cost?

The cost of guaranteed issue life insurance depends on your age and sex. The more coverage you buy, the more you will pay. Monthly premiums can range from $30 to over $500.

Who should get guaranteed issue life insurance?

Seniors who don’t qualify for traditional life insurance due to their age and health often buy guaranteed issue policies to cover funeral expenses.