Guaranteed issue life insurance

If you don’t qualify for a traditional life insurance policy because of your age or health, guaranteed issue life insurance can give your loved ones some financial protection.

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What is guaranteed issue life insurance?

Guaranteed issue life insurance belongs to a category of policies called final expense life insurance and is a type of permanent life insurance. It’s best for people between age 50 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 comparatively small death benefit, but it can help your loved ones pay for end-of-life expenses, such as 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 functions differently than other types of life insurance. Here’s how:

  • A basic application is required — no medical exam, health questions, or waiting period.

  • Nearly all applicants are approved.

  • The coverage amount payable to your beneficiary at the end of your life usually has a maximum limit of $25,000.

  • Some guaranteed issue life insurance policies have graded death benefits, which means you have to hold the policy for at least two years before it will pay the full death benefit

  • If you pass away before owning the policy for two years, your beneficiaries get refunded 110% of premiums you’ve paid into the policy. So if you’ve paid $100 in premiums, your beneficiaries will receive $110.

Unlike a whole life insurance policy, guaranteed issue life insurance doesn’t have a cash value. You simply make premium payments in exchange for a fixed amount to be paid out upon death.

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

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.

Guaranteed issue life insurance is better for seniors or people who don’t qualify for any other type of life insurance. There's no medical questionnaire and almost no one is turned down.

How much does guaranteed issue life insurance cost?

Because guaranteed issue life insurance covers high-risk people, it’s more expensive than other forms of final expense life insurance — upwards of $200 per month for some older buyers. Meanwhile, the death benefit amounts are pretty low — topping off at $25,000.

How are guaranteed issue premiums calculated?

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

Take a look at the sample rates below. A 60-year-old male would pay $101.21 monthly for a $15,000 guaranteed issue whole life insurance policy, whereas an 80-year-old male would pay $308.48 for the same face value amount. 

Guaranteed issue life insurance rates by age

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

Methodology: Sample quotes based on AIG policies offered by Policygenius in December 2021.

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. Plus, guaranteed issue policies come with graded death benefits, which may leave your beneficiaries with only a refund of your premiums paid if you die soon after buying coverage.

Advantages of guaranteed issue whole life insurance

  • Fast, near-guaranteed approval  

  • Provides a death benefit to your beneficiaries

  • No medical exam required  

Disadvantages of guaranteed issue whole life insurance

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

  • More expensive than traditional life insurance

  • Payouts are lower than traditional policies 

  • Graded death benefits mean the policy won’t pay out in full if you die in the first two years 

  • Does not pay out a death benefit in cases of suicide, regardless of when it occurred

Which companies sell guaranteed life insurance?

Guaranteed issue life insurance is one of the many products offered by well-known and trusted insurance companies. We recommend our partner insurer, AIG, to those looking for guaranteed life insurance.

→ Check out our top-rated life insurance companies here

How do you buy a guaranteed issue life insurance policy?

A Policygenius agent can help you apply for a guaranteed issue life insurance policy. After applying, 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.

→ Learn more about how to buy life insurance here

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What alternatives are there to guaranteed issue life insurance?

Guaranteed issue life insurance should be a last resort. You should opt for one of the insurance alternatives we’ve listed below if you qualify.

Term life insurance

Some shoppers with serious illnesses are too easily discouraged from shopping for a traditional term life insurance policy. Just because you’re rejected from one term life insurance company does not 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 from each other. An independent life insurance broker, like Policygenius, will help you find the right term life insurance coverage for your profile.

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. 

→ Learn more about term life insurance

Simplified whole life insurance

Simplified whole 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 upwards 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.

→ Learn more about pre-need life insurance

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 have a lengthier application process that can include a medical exam and review of your hobbies, finances, and lifestyle. Guaranteed issue skips these underwriting steps. However, non-guaranteed policies are more affordable and provide more coverage than guaranteed issue policies.

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.