Guaranteed issue life insurance belongs to a category of policies called final expense 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. It’s usually used to cover end-of-life costs like funeral expenses.
Unlike term life 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 good life insurance option if you’re unable to qualify for other types of insurance.
Application acceptance is guaranteed for most people.
You may be denied if you don’t meet the age, state of residency, or citizenship status requirements.
When is guaranteed issue life insurance right for you?
Guaranteed issue life insurance is a good option for people who have significant health issues that prohibit them from getting other types of life insurance. However, guaranteed issue insurance will be more expensive than other types of insurance. Guaranteed issue is usually a competitive option for people who have the following health challenges.
Alzheimer’s or dementia
Cancer other than basal cell or squamous cell skin cancer
Kidney disease requiring a transplant or dialysis
AIDS or HIV
Any terminal illness where a doctor has given you a life expectancy of two years or less.
Speaking with a licensed agent is the best way to determine whether or not guaranteed issue life insurance is right for you.
How does guaranteed issue life insurance work?
Guaranteed issue life insurance works differently from other types of life insurance.
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 typically 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 during the first two years of your coverage, you won’t be able to claim the full death benefit, but your beneficiaries will be refunded 110% of the premiums you’ve paid into the policy.
Your beneficiaries get a 100% refund if you die by suicide within the first two years of coverage. If you die due to an accident in the first two years of the policy, your beneficiaries would still receive 100% of the death benefit.
How much does guaranteed issue life insurance cost?
A 50-year-old woman will pay less than $100 per month for a guaranteed issue life insurance policy with a $25,000 death benefit payout. A 50-year-old man will pay less than $137 per month for the same coverage.
Unlike other types of life insurance, where the price of your policy will change depending on variables like age, hobbies, and medical conditions, guaranteed issue life insurance policies offer fixed prices based on your age when you apply.
Take a look at the sample rates below for monthly premiums for guaranteed issue life insurance policies with $5,000, $15,000, and $25,000 payouts.
Age | Gender | $5,000 coverage amount | $15,000 coverage amount | $25,000 coverage amount |
|---|---|---|---|---|
50 | Female | $20.29 | $56.87 | $99.23 |
Male | $28.99 | $82.98 | $136.9 | |
65 | Female | $34.21 | $98.63 | $182.29 |
Male | $46.42 | $135.25 | $248.84 | |
80 | Female | $95.77 | $283.30 | $512.78 |
Male | $104.16 | $308.48 | $519.08 |
Methodology: Sample rates are for males and females buying a guaranteed issue life insurance policy from Corebridge Financial policies in May 2023 and may vary by insurer, term, coverage amount, health class, and state. Not all policies are available in all states. Rates valid as of 06/01/2023.
Because guaranteed issue life insurance covers people with certain health considerations or other insurance risks, it’s the most expensive type of final expense insurance — between $40 and $215 per month for a 65-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 that coverage — a $250,000 death benefit payout — would cost about $70 per month for the same 65-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 your application is submitted, you’ll receive a decision quickly, since there isn’t a medical exam or other reports for the insurer to consider.
Once you sign and return your policy, and pay your first premium, your policy is in force. 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 Corebridge Financial (formerly AIG Life & Retirement) and Mutual of Omaha offer guaranteed issue policies through the Policygenius marketplace.
→ Check out our top-rated life insurance companies
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Is guaranteed issue life insurance worth it?
Guaranteed issue life insurance makes sense if you’re not eligible for other types of life insurance. In almost all cases, however, 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 that offers near-certain approval and pays small death benefit amounts — usually between $5,000 and $25,000 — to cover final expenses, like a funeral. Unlike many other types of life insurance, you don’t need to take a medical exam or answer a medical questionnaire as part of the application process.
What are the alternatives to guaranteed issue life insurance?
Some of the alternatives to guaranteed issue life insurance include term life insurance, simplified issue life insurance, funeral insurance, and pre-need funeral home contracts. For many people, guaranteed issue life insurance is a last resort and shouldn’t be pursued until you know you’re not eligible for other types of life insurance.
Who should get guaranteed issue life insurance?
People who need insurance but don’t qualify for traditional life insurance due to their age or health are the best candidates to buy guaranteed issue policies.
