Understanding Guaranteed Issue Life Insurance

Table of Contents

Applying for a life insurance policy can be intimidating. The application, medical exam, and underwriting process can seem daunting and invasive. It can feel extra stressful if you have pre-existing health conditions or other reasons to think you might get turned down for a policy. 

That’s where guaranteed issue life insurance policies come in. You can get a guaranteed life insurance policy without taking a medical exam or even needing to answer any medical questions whatsoever.

As long as you meet the company’s basic age requirements, you won’t be turned down for a policy; acceptance is guaranteed. That is why guaranteed issue life insurance policies are a good fit for people who would have trouble getting life insurance coverage when traditional underwriting is required.  

A guaranteed issue policy may sound like the perfect life insurance plan, but some hefty limitations come with coverage compared to a traditional life insurance policy.

For example, the total available death benefit amount is significantly less than what you can get with traditional life insurance policies. The cost of coverage is also often expensive. During the first two policy years, the death benefit is only equal to a full return or premiums plus interest if you pass away during that timeframe.

So, while guaranteed issue plans can be helpful in some cases, they’re not often the best choice for many people. But for some, it could very well be the best option to obtaining a life insurance policy.

If you’re looking for helpful information about guaranteed issue life insurance plans and even the companies that can offer this type of coverage, keep reading as we believe we have put together one of the most extensive guidelines available to guaranteed issue life insurance plans.

The Basics of Guaranteed Issue Life Insurance

Guaranteed issue life insurance is actually a form of whole life insurance which falls under permanent life insurance. These plans have been designed for people who are not in good health and those with pre-existing medical conditions that would generally be considered a decline for a traditional life insurance policy that would require medical underwriting.

On the other hand, a guaranteed issue life insurance can also be used by anyone looking for a policy without going through the usual extensive underwriting process typical of traditional life insurance policies.

As mentioned, guaranteed issue life insurance also referred to as guaranteed acceptance life insurance or GI for short is whole life insurance. These plans offer a lifetime of permanent life insurance coverage along with a premium payment that is guaranteed to remain the same price throughout the entire time the contract is active.

In addition to lifetime protection, another benefit that guaranteed issue insurance offers is the accumulation of guaranteed cash value growth. As with any whole life insurance policy, the cash value growth will accumulate every time a premium payment is paid.

The insurance company will split a predetermined portion of every premium payment and deposit it into the cash value account, where it will continue to grow over the course of owning the policy.

The benefit of the cash value account is that after it has built up some value (which generally begins after the first policy year), it can be borrowed against and used anyway needed. Be aware that borrowing money from the cash value of a life insurance policy will have an annual interest charge of typically 8%. 

While guaranteed issue life insurance policies are whole life insurance plans, they fall under the umbrella of final expense insurance. The maximum amount of coverage is often limited to $25,000, making it enough protection to cover any final expenses such as funeral costs, small household debts, and potential medical bills.

Unlike the traditional life insurance policies where death amounts can range from $100,000 and go as high as a few million dollars, guaranteed issue life insurance will not offer enough death benefit protection to replace your income, help pay for your children’s educational expenses, or cover other major financial obligations.

What information is needed to apply for a guaranteed issue life insurance policy?

Guaranteed issue life insurance companies accept nearly every applicant that applies for coverage. As a rule, you won’t be turned for a policy as long as you meet the age range for coverage which is generally ages 50-85. The life insurance coverage will also need to be available in the state you live in as well.

The entire application process is significantly shorter than applying for a traditional life insurance policy. The application is often 1-2 pages long and can be completed within minutes will the high potential of same-day approval, especially if the life insurance provider offers an online application process.

Information required on the application is very minimal and nowhere near as invasive as applying for traditional life insurance. When completing a guaranteed issue life insurance application, be prepared to give the following:

  • Name
  • Gender
  • Social Security Number (Required to verify identity)
  • Contact Information
  • Citizenship
  • Coverage Amount
  • Beneficiary Information

Most applications for coverage will also have a section where you can complete payment information for automatic monthly bank drafts or submit credit card withdrawal information. When this information is included, the insurance company will be able to draft payment upon approval so that your life insurance coverage is immediately activated.

Applications can be completed by paper or for the fastest results, with a licensed life insurance agent done online or over the phone. As mentioned, once you apply, you’ll generally get a response to approval instantly as there is no medical underwriting required. You will never need to take a medical exam, complete labs, or answer any health-related questions for guaranteed issue coverage.

Best of all, there are no surprises when it comes to your approved rates. This is because guaranteed issue plans are not based on the outcome of a rate classification. You will know how much your coverage will cost before completing the application, and that price will not change when the application for coverage has been approved.

Two-year graded death benefit

It’s important to note that all guaranteed issue policies have a waiting period before they’ll pay out the full death benefit to your beneficiaries. This is done because of the level of risk the insurance company is taking on by accepting all applicants regardless of their past or current medical history.

The waiting period is generally an automatic two years before the full death benefit will be eligible for payout. This means that your beneficiaries will not receive your death benefit if you die during the first two years of your policy.

Instead of being paid the death benefit, your beneficiary would receive every single payment you paid in premiums during the entire time your policy was active, plus interest on the paid premiums of typically 10%.

For example, let’s say you were paying $100 a month for a $10,000 guaranteed issue life insurance policy, and you died after 18 months. Your beneficiary would get back the $1800 you’d paid in premiums plus 10% interest for a total of $1980, but they wouldn’t get the $10,000 payout.

On the other hand, if you pass away one day after the second policy year or thereafter, the full $10,000 death benefit would be paid to the beneficiary of the life insurance policy.

Although the full death benefit is not payable until the second policy year has been completed, there is one exception to this rule. Any passing due to a direct result of an accident, the full death benefit will be payable to the beneficiary.

The Cost of Guaranteed Issue Life Insurance

Traditionally, life insurance companies primarily set premiums based on your gender, health, age, and overall risk of death. This allows them to charge lower rates to young and healthy policyholders who are less at risk of the insurance company is paying out an early death benefit claim due to health-related medical conditions or factors viewed as high-risk.

On the other hand, guaranteed issue life insurance policies will accept everyone, including very high-risk applicants. It does not matter if an applicant has been recently diagnosed with cancer, being treated for a chronic medical condition, etc. You will not be turned away for a policy.

This is what drives up the price of these plans.

Since guaranteed issue plans do not require any medical underwriting, the rates for coverage are based on a fixed price. These policies have one set rate for every gender classification, age, and amount of coverage applied for. There is no option to receive a lower rate based on the severity of a particular medical condition or lifestyle habits because there are minimal underwriting requirements.

In addition, coverage limits are a lot lower than all other types of life insurance. That means you’re going to pay more for less coverage.

How much coverage can you get with guaranteed issue life insurance?

Guaranteed issue life insurance plans offer coverage amounts starting as low as $1,000 up to a maximum of $25,000. The only exception that we are aware of is a company called Great Western Insurance Company (GWIC), currently offering up to $40,000, making them the one company to offer more than the standard maximum of $25,000.

Keep in mind that these plans are really designed to offer enough life insurance protection to ensure that there would be enough funds to take care of final expenses such as funeral costs, unpaid medical bills, or any small remaining debts.

Without any medical underwriting and accepting nearly every applicant that meets the age requirements, the insurance company needs to limit its risk, therefore, keeping coverage amounts low and premiums for coverage costly.

How much will you pay for a guaranteed issue policy?

Below is a comparison table of actual monthly life insurance rates for a guaranteed issue life insurance policy in 2021. Utilizing our online quote comparison tool, these rates represent the top provider for each age, gender and death benefit amount.

Guaranteed Issue Life Insurance Rates By Age

MALE RATES$10,000$15,000$25,000
Age 50$44.09$65.68$108.85
Age 55$57.93$86.44$143.46
Age 60$63.89$95.38$158.35
Age 65$85.16$127.28$211.52
Age 70$99.18$148.32$246.58
Age 75$139.52$208.82$347.42
Age 80$206.32$308.48$519.08
Age 85$233.16$347.56$532.21
FEMALE RATES$10,000$15,000$25,000
Age 50$34.47$51.24$84.79
Age 55$44.27$65.95$109.31
Age 60$51.06$76.13$126.27
Age 65$62.61$93.45$155.15
Age 70$75.53$112.84$187.46
Age 75$108.17$161.79$269.04
Age 80$167.00$248.32$439.55
Age 85$221.00$329.32$396.97

*Monthly rates shown in the above table are based on a male/female applying for a guaranteed issue policy. Rates are current as of 05/12/2021, representing the cost of a $10,000, $15,000, and $25,000 guaranteed acceptance life insurance policy.

Benefits of Guaranteed Issue Life Insurance

The primary benefit of a guaranteed acceptance life insurance is that it offers exactly what its name suggests. Almost everyone will be accepted, and applying for a policy is fast and beyond easy.

That makes guaranteed issue life insurance policies a great idea for people who are having trouble getting approved for a traditional life insurance policy that would normally require full medical underwriting.

The coverage amounts offered by guaranteed issue life insurance policies are smaller than standard life insurance policies. However, it will be enough to pay for a funeral and other final expenses.

With proper planning, a guaranteed issue policy can keep your family from having to borrow from savings or taking out loans to pay these costs. That’s why it’s always better to have a small policy than no policy at all. Even a small policy can be a great help to your loved ones if you pass away.

Other benefits that guaranteed issue life insurance plans offer include:

Permanent Life Insurance Protection

As long as you pay your life insurance premiums, guaranteed acceptance plans will never expire. These plans are classified as whole life insurance, which is a form of permanent life insurance.

Fixed Premium Payment

In addition to the lifetime of protection these plans offer, they also have a premium payment that will never change beginning the first day coverage is active.

Cash Value Growth

All guaranteed issue life insurance plans are guaranteed to build cash value growth. As premium payments are paid, a smaller portion of every payment is deposited into the cash-value account, where the money can be borrowed if ever needed.

Designed For Seniors

Guaranteed issue plans are designed with senior citizens in mind. They are easy to understand and provide a means of getting valuable life insurance coverage, especially to those who may have had complications to their health.

In addition to these plans being beneficial to seniors with health issues, most seniors do not require a large amount of death benefit coverage. Life insurance needs tend to lessen as we get older. Since these plans are limited to $25,000 of coverage or less, they are often ideal in covering the life insurance needs that most seniors require.

Drawbacks of Guaranteed Issue Life Insurance

Guaranteed issue life insurance isn’t for everyone. The policies can be expensive, and coverage amounts are small. Plus, insurance companies will not pay out the full death benefit during the first two years of the policy. That makes the policy more of a gamble than many other types of life insurance, especially if you’re already facing an illness when you apply.

Here are a few of the drawbacks that you should consider regarding guaranteed issue life insurance policies.

2-Year Wait On Full Death Benefit Concern

It is understandable if you are concerned that the full death benefit would not be paid out until the third year. However, it is a way for the insurance company to offset the risk of paying out an early death benefit shortly after a policy has been taken out. Often, when people learn about the graded death benefit period, they often run far away from the idea of purchasing one of these plans.

On the other hand, because your beneficiary would receive a full return of premiums paid plus interest, we tend to look at owning a guaranteed acceptance plan more like a savings plan should the unthinkable occur before the graded death benefit period has expired. Because of the return of premium feature, investing in one of these plans would not result in a total loss of money.

If the average premium payment on a $10,000 GI life insurance policy is $125 per month and the insured passed away twelve months after taking the policy out, that would provide the beneficiary a death benefit payout of $1,650, including the 10% interest.

While the payout would fall very short of the $10,000 death benefit, the money received could still be used to pay on debts or towards funeral costs. 

Limited Age Eligibility

Most of the well-known guaranteed acceptance plans are limited to a select age group of 50-85. If you are below age 50 and have a medical history or risky lifestyle, and are unable to qualify for a full underwritten life insurance policy, you could have difficulty finding options for coverage.

$25,000 Maximum Death Benefit

If you’re specifically purchasing coverage to ensure that small final expenses are taken care of after your passing, then a $25,000 death benefit or less could often be enough life insurance coverage. However, if you require enough life insurance to replace income, a guaranteed issue policy will be a bad option. You could purchase multiple policies to get you where you need, but it will be a costly option.

Can Be Expensive

We have mentioned it a few times throughout this article already, but guaranteed issue plans do not come at a cheap cost. The cost for these plans, especially for senior applicants, can start at $100 per month for coverage of $10,000. Compared to traditional final expense plans, a guaranteed issue policy will range from 1-3x higher for the same amount of coverage.

Being denied a guaranteed issue life insurance policy

It is also important to point out that you can actually be denied a guaranteed life insurance policy despite the name. Although it’s doubtful to be declined a policy, there are a few circumstances that can result in denial, including:

  • Not a U.S. citizen
  • Being outside the company’s age range
  • Not being of sound mind to purchase coverage

Other factors that can cause a decline will depend on the insurance company. These may include the following:

  • The insured and owner of the policy are not the same
  • Currently confined to a hospital, hospice, nursing home, or convalescent home
  • Receiving home health nursing care
  • Positive for AIDS or HIV
  • Have been diagnosed with a terminal illness and have less than 24 months to live
  • Currently serving a prison sentence

Life Insurance Companies That Offer Guaranteed Issue Plans

Guaranteed issue life insurance policies are offered by many trusted and respected companies but are in no way as common as term life insurance and therefore may require some research to find the companies that can offer this type of coverage.

As an independent life insurance agency, No Medical Exam Quotes has contracted with several life insurance providers, many of which offer guaranteed issue life insurance plans. Because we have first-hand experience working with many of these companies, we believe it is important for our readers to have a general idea of what each of these providers can offer in terms of coverage.

Sure, the concept is simple as all of these providers offer guaranteed acceptance, but what about other factors such as financial strength ratings, death benefit amounts, coverage limitations, issue ages, or graded death benefit durations?

These are all factors that should be considered when choosing a guaranteed issue provider.

Based on our experience, we have put together the below table representing the life insurance companies currently offering a guaranteed issue life insurance and how NMEQ ranks each of these providers based on their guaranteed issue life insurance product.

Best Guaranteed Issue Plans in Ranking Order

RankingProviderAM Best RatingIssue AgesCoverage AmountsGraded BenefitROP Interest
#1Gerber LifeA 50 - 85$5,000 - $25,00024 Months10%
#2AIGA50 - 85$5,000 - $25,00024 Months10%
#3GWICA40 - 80$1,000 - $40,00024 Months10%
#4MOOA+45 - 85$2,000 - $25,00024 Months10%
#5AARPA++50 - 85$2,500 - $25,00024 Months10%
#6TruStageA45 - 80$2,000 - $20,00024 Months10%
#7UHLA-45 - 75$5,000 - $25,00024 Months8%
#8SONNR0 - 85$5,000 - $25,00024 Months4.5%
#9Colonial PennA-50 - 85Varies24 Months7%
#10Vantis LifeA+50 - 80$5,000 - $20,00024 Months0%
#11AmericoA50 - 80$2,000 - $10,00036 Months*See listing
#12FidelityA-50 - 85$5,000 - $25,00036 Months5%

AARP

AARP Guaranteed Acceptance - Coverage Outline
Company:AARP
AM Best Rating:A++ (Superior)
Policy Name:AARP Easy Acceptance Whole Life Insurance
Product Type:Whole Life Insurance
Contract Duration:Lifetime
Issue Ages:50-85
Minimum Coverage Amount:$2,500
Maximum Coverage Amount:$25,000
Application Options:Paper application sent by mail
Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 10% interest.
Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year three and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
Approval Time:Generally a few days after application has been received
State Availability:Available in all states

AIG

AIG Guaranteed Issue - Coverage Outline
Company:AIG
AM Best Rating:A (Excellent)
Policy Name:AIG Guaranteed Issue Whole Life - GWIL
Product Type:Whole Life Insurance
Contract Duration:Lifetime
Issue Ages:50-85
Minimum Coverage Amount:$5,000
Maximum Coverage Amount:$25,000
Application Options:Completed online with a licensed agent
Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 10% interest.
Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year three and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
Approval Time:15 minutes
State Availability:Available in all states except for ME and NY

*Chronic Illness Rider is not available in the state of CA or DC. The Terminal Illness Rider is not available in the state of DC. 

Americo

Americo Logo
Americo Guaranteed Issue Life Insurance - Coverage Outline
Company:Americo
AM Best Rating:A (Excellent)
Policy Name:Eagle Guaranteed
Product Type:Whole Life Insurance
Contract Duration:Lifetime
Issue Ages:50-80
Minimum Coverage Amount:$2,000
Maximum Coverage Amount:$10,000
Application Options:Paper, telephone and online applications are all available
Graded Death Benefit Period:
  • Policy Year 1: 105% of all premiums paid
  • Policy Year 2: 110% of all premiums paid
  • Policy Year 3: 75% of the full death benefit amount
  • Full Death Benefit Payout:Policy Years 4+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Online and telephone applications will yield the quickest approval times while paper applications will slow down the approval timeframe.
    State Availability:Available in all states except for NY

    Colonial Penn

    Colonial Penn Guaranteed Acceptance Life Insurance - Coverage Outline
    Company:Colonial Penn
    AM Best Rating:A- (Excellent)
    Policy Name:Guaranteed Acceptance Life Insurance from Colonial Penn
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:50-85
    Minimum Coverage Amount:Varies based on age, gender and state
    Maximum Coverage Amount:Varies based on age, gender and state
    Application Options:Online and paper applications available
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 7% interest.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Policies are generally issued within 24-48 hours.
    State Availability:Available in all states

    Gerber Life

    Gerber Guaranteed Life Insurance - Coverage Outline
    Company:Gerber Life
    AM Best Rating:A (Excellent)
    Policy Name:Gerber Life Guaranteed Life
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:50-85
    Minimum Coverage Amount:$5,000
    Maximum Coverage Amount:$25,000
    Application Options:Paper, telephone and online applications are all available
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 10% interest.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year three and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Online and telephone applications will yield the quickest approval times while paper applications will slow down the approval timeframe.
    State Availability:Available in all states except for MT

    Fidelity

    Fidelity Guaranteed Issue Life Insurance - Coverage Outline
    Company:Fidelity
    AM Best Rating:A- (Excellent)
    Policy Name:RAPIDecision Guaranteed Issue
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:50-85
    Minimum Coverage Amount:$5,000
    Maximum Coverage Amount:$25,000
    Application Options:Online application process
    Graded Death Benefit Period:Policy Years 1-3: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 5% interest.
    Full Death Benefit Payout:Policy Years 4+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Policies are generally issued within 24-48 hours.
    State Availability:Available in all states except for NY and WY

    Great Western

    Great Western Guaranteed Life Insurance - Coverage Outline
    Company:Great Western Insurance Company
    AM Best Rating:A (Excellent)
    Policy Name:Guaranteed Assurance
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:40-80
    Minimum Coverage Amount:$1,000
    Maximum Coverage Amount:$40,000
    Application Options:Paper, telephone and online applications are all available
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 10% interest.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year three and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Online and telephone applications will yield the quickest approval times while paper applications will slow down the approval timeframe.
    State Availability:Available in all states except for AK, DE, HI, ME, NY and VT

    Mutual of Omaha

    Mutual of Omaha Guaranteed Issue Life Insurance - Coverage Outline
    Company:Mutual of Omaha
    AM Best Rating:A+ (Superior)
    Policy Name:Guaranteed Whole Life Insurance
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:45-85
    Minimum Coverage Amount:$2,000
    Maximum Coverage Amount:$25,000
    Application Options:Must be purchased directly through Mutual of Omaha
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 10% interest.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Policies are generally issued within 24-48 hours.
    State Availability:Available in all states

    Sons of Norway

    Sons of Norway Guaranteed Issue Whole Life - Coverage Outline
    Company:Sons of Norway
    AM Best Rating:NR (Not Rated)
    Policy Name:Guaranteed Issue Whole Life
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:0-85
    Minimum Coverage Amount:$5,000
    Maximum Coverage Amount:$25,000
    Application Options:Online application process
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 4.5% interest.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Approval is generally instantly through the online application process.
    State Availability:Available in all states except CA and NY

    TruStage

    TruStage Guaranteed Acceptance Whole Life - Coverage Outline
    Company:TruStage
    AM Best Rating:A (Excellent)
    Policy Name:TruStage Guaranteed Acceptance Whole Life
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:45-80
    Minimum Coverage Amount:$2,000
    Maximum Coverage Amount:$20,000
    Application Options:Online application process
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 10% interest.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Approval is generally instantly through the online application process.
    State Availability:Available in all states except NY

    United Home Life

    United Home Life Guaranteed Issue Life Insurance - Coverage Outline
    Company:United Home Life Insurance Company
    AM Best Rating:A- (Excellent)
    Policy Name:Guaranteed Issue Whole Life
    Product Type:Whole Life Insurance
    Contract Duration:Coverage to age 100
    Issue Ages:45-75
    Minimum Coverage Amount:$5,000
    Maximum Coverage Amount:$25,000
    Application Options:Online and paper applications available
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid plus 8% interest.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Policies are generally issued within 24-48 hours.
    State Availability:Available in all states except AR, KS, MA, MN, NH, NV and NY

    Vantis Life

    Vantis Life Guaranteed Issue Life Insurance - Coverage Outline
    Company:Vantis Life
    AM Best Rating:A+ (Superior)
    Policy Name:Guaranteed Golden
    Product Type:Whole Life Insurance
    Contract Duration:Lifetime
    Issue Ages:50-80
    Minimum Coverage Amount:$5,000
    Maximum Coverage Amount:$20,000
    Application Options:Online application process
    Graded Death Benefit Period:Policy Years 1-2: If death occurs in policy years one or two, the death benefit is equal to a full return of all premiums paid.
    Full Death Benefit Payout:Policy Years 3+: The full death benefit is payable beginning policy year four and anytime thereafter. Any death caused by an accidental death will qualify for a full death benefit payout regardless of the policy year.
    Approval Time:Approval is generally instantly through the online application process.
    State Availability:Available in all states except NY

    Alternatives to Guaranteed Issue Life Insurance

    Guaranteed issue life insurance policies are best for people who are looking to leave their loved ones enough money to cover any end-of-life expenses. They can be a great fit for seniors, people with high-risk health conditions, or anyone else who is having a hard time getting a standard life insurance policy.

    However, they’re not the right type of life insurance for everyone by far. If you qualify for a fully underwritten life insurance policy, it is highly recommended that you choose that option over a guaranteed acceptance policy.

    There are several other options to get the life insurance coverage you need. Even if you think you won’t qualify, it’s always a good idea to get quotes from a few different types of insurance. You might be able to get a larger policy for a surprisingly affordable rate if you go with a different type of life insurance.

    Below are some great alternatives if guaranteed issue life insurance doesn’t make sense.

    Term Life Insurance

    Term life insurance is without a doubt the most popular form of life insurance. However, term life insurance plans often require full underwriting as guaranteed issue term plans are extremely rare and usually only found on group life insurance plans offered through an employer. 

    When you buy term life, you’re buying coverage that will last you a set period of time or contract lengths. Term contract lengths range between 10 and 30 years, depending on your age when purchasing a policy. Once your policy term ends, your policy will no longer be active. Term policies don’t build any cash value.

    With a term policy, you can get a large benefit amount without paying a lot of money. If your income supports it, you can take out a term policy worth millions of dollars for a very reasonable monthly rate. This is why it is a perfect option for families that require a high need of protection.

    Your rates for a term a policy will be determined by your:

    • Age
    • Gender
    • Hobbies
    • Smoking status
    • Driving record
    • Health history
    • Medical exam results
    • Information from consumer reporting agencies

    The long list of factors that go into underwriting a term life insurance policy can scare some people off from applying for a policy. Many people with a pre-existing health condition assume they wouldn’t qualify for a term policy. They might be surprised to learn there are term policies they’d qualify for.

    No two life companies have the same underwriting standards. A person could get turned down by one company and offered a great rate by another. That’s why comparing quotes for term policies is the best place to start your insurance shopping. If you can qualify, they’re always going to provide a better value than guaranteed acceptance plans.

    Even if the rates you’re quoted are similar to or slightly higher than the rates for guaranteed issue life insurance, you’ll be getting a larger policy. Term life policies offer larger enough benefit amounts that you can make sure your family remains financially stable if you pass away.

    You’ll have coverage that goes beyond your final expenses. You can leave money towards paying bills, paying for your children’s expenses, ensuring your family keeps their home, and more. Term life insurance also offers smaller benefit amounts generally starting at $25,000, making it perfect for coverage final expense at an affordable cost.

    Reaching out to an agent or broker is a smart way to shop for term policies if you’re not sure you’ll qualify. The agent or broker can work with you to find a company that might offer you coverage. They’ll be able to match you with companies and give you quotes and walk you through the application process and keep you updated every step of the way.

    No Exam Term Life insurance

    Many term life insurance providers now offer a no medical exam underwriting option to qualifying applicants that would like to pass on taking an exam to get life insurance. This option makes applying for term life insurance fast and convenient, but in no way should the option be mistaken as a guaranteed acceptance policy.

    Where guaranteed acceptance plans will accept everyone without any medical questions asked, no medical exam term life insurance is fully underwritten plans requiring answers to medical questions.

    However, not everyone will qualify or meet the guidelines for a no-exam term insurance policy. For example, these plans are generally reserved for applicants between the ages of 18 and 65. Coverage is also limited, with some companies offering a maximum death benefit amount of up to $500,000 or $1,000,000, depending on the provider.

    Since no exam term insurance does not require any lab testing, insurance companies that offer the option tend to limit the option to healthier applicants. Those who do not meet the underwriting criteria due to high-risk health conditions may not be eligible for coverage or be asked to complete a medical exam to consider coverage.

    Accidental Death Insurance

    Accidental death insurance often referred to as AD&D insurance, is a type of insurance policy that provides financial protection against accidental death. Like life insurance, an accidental death policy has a death benefit, an insured, and a beneficiary. If the insureds death is a direct result of an accident, the death benefit will be paid to the beneficiary.

    With accidental death insurance, you will not be required to take a medical exam or even be required to answer medical questions. Just like guaranteed issue life insurance, these plans are also considered guaranteed acceptance insurance plans.

    The biggest difference is that accidental insurance allows insureds to get much higher coverage amounts than what you can get with guaranteed issue life insurance. Most accidental coverage amounts offer a maximum benefit amount of up to $500,000, whereas guaranteed issue life insurance plans are capped at a maximum death benefit of $25,000.

    However, accidental death plans will not pay out a death benefit if the insureds death is anything other than an accident. Guaranteed issue plans will payout on all deaths, accidental and health-related after policy year two has been completed.

    If a guaranteed issue life insurance plan does not meet your coverage needs or if you are too young to qualify for a guaranteed issue plan, consider looking into an accidental insurance policy.

    Final Expense Whole Life Insurance

    Final expense insurance and guaranteed issue life insurance share many of the same features. In reality, they are both simplified issue whole life insurance plans that do not require medical exams, and both focus on providing financial protection to any end of life expenses.

    Final expense whole life insurance and guaranteed issue whole life insurance offers a guaranteed death benefit, guaranteed cash value growth, and a premium payment that is guaranteed to remain the same price throughout the entire duration of the policy.

    The difference between a guaranteed issue life insurance plan and a final expense policy is within the application and how the death benefit will payout based on the responses to the medical questions.

    Guaranteed issue plans can be costly but will not require any health questions at all. However, final expense plans are more affordable but will require you to answer medical questions. Depending on the responses to the health questions, you may qualify for one of three different plans only offered with final expense life insurance. These plans include the following:

    Level Death Benefit – Applicants with a good history of health are likely to qualify for a level death benefit plan. The level death benefit plan has no restrictions on the death benefit payout, meaning it will pay the full death benefit starting the first day coverage is active. The level death benefit plan will also result in the most affordable rates for coverage.   

    Modified Death Benefit – If offered by the insurance company, a modified death benefit would pay out a specific percentage of the death benefit if death occurs during the first two policy years. For example, a modified death benefit may pay only 30% of the death benefit in policy year one and then 70% of the full death benefit in policy year two. After policy year two, the full death benefit would be payable when death has occurred.

    Graded Death Benefit – A graded death benefit plan is what guaranteed acceptance plans offer but will be cheaper since you will be required to answer medical questions and could be declined for coverage based on certain medical risks.

    If you qualify for coverage during the first two policy years, the death benefit is limited to a total return of premiums plus interest of generally 10%. After policy year three, the coverage qualifies for a full payout of the death benefit.

    If approved for final expense coverage, it will result in a much lower rate than the rates offered by guaranteed issue life. 

    Funeral Insurance

    Funeral insurance is not actually a real type of life insurance but rather a marketing term used to sell final expense insurance. The term “funeral insurance” will often be seen at funeral homes. If offered, you can purchase a final expense policy through the funeral home handling your funeral arrangements.

    Funeral homes will often have a licensed agent onsite that either works for the funeral home or use an agency that the funeral home has partnered with to offer funeral insurance plans.

    The concept behind these plans is rather simple. You would work with the funeral home director in planning out the total cost of your funeral arrangements. After determining the final cost, you could purchase a policy for the amount required to pay for the entire funeral cost.

    If considering a funeral insurance policy, be aware of how you set up the beneficiary. Some funeral homes may ask that you make them the beneficiary of your life insurance policy. However, a better option is utilizing a collateral assignment approach.

    A collateral assignment allows you to name a loved one as your beneficiary but assigns the funeral as an assignee. If you pass the funeral home would only receive the amount due to pay for the funeral costs, while any remaining death benefit would be paid to the beneficiary.

    When dealing with a funeral home and funeral insurance, be sure you understand what you are purchasing. Make sure you know if your policy is a level benefit, modified benefit, or graded benefit.

    Pre-need funeral home contracts

    A pre-need funeral plan isn’t a life insurance policy at all. There is no death benefit payout if you pass. Instead, it is a contract between you and the funeral home you choose to handle your funeral arrangements.

    A pre-need funeral contract allows you to plan out every detail of your funeral, so you can know the actual cost of what it will require to have the services you wish. Then a contract is drawn up in which you can pay for the funeral costs upfront or in multiple payments outlined within the contract. 

    This type of funeral planning, also commonly referred to as “pre-paid funeral planning,” and can be an excellent alternative to a guaranteed acceptance policy but does have some potential drawbacks worth considering. 

    Pre-need funeral plans can offer both guaranteed services as well as non-guaranteed services. It is always best to confirm with the funeral home whether or not the cost for services in the contract is guaranteed or non-guaranteed. A contract with non-guaranteed services could require additional charges after your passing, while guaranteed services lock the cost in.

    Another risk of pre-need funeral plans is that they are tied to one specific funeral home. These contracts are, in most cases, non-transferable. So, if you end up moving states away or change your mind about the funeral home, you’ll need to start all over again, and you’ll want to make sure that any money paid towards the funeral contract is refundable if that does happen.

    If you’re are unable to qualify for a traditional life insurance policy, and the cost of a guaranteed issue life insurance plan is too much, consider working with a local funeral home and learning about pre-paid funeral packages.

    Crowdfunding

    Crowdfunding platforms such as GoFundMe, FundRazr, and Fundly, to name a few, have become a helpful way to raise money quickly from participating donors.

    Fundraising campaigns can be set up for almost anything that would require some financial help from donors. This may include campaigns to collect donations for:

    • Medical Bills
    • Financial Emergencies
    • Nonprofit
    • Animals Bills
    • Environmental Causes
    • Business Expenses 
    • Community Functions
    • Sporting Events
    • Travel Expenses
    • Church Donations
    • Wishes

    As you can see, crowdfunding campaigns are available to help on multiple causes, and that also includes raising money to help pay for a loved one funeral costs. With the average median funeral cost in 2021 costing around $10,000, that amount of money can be a heavy financial burden on family members, especially if the deceased loved one did not have a life insurance policy.

    If the cost of a guaranteed acceptance policy is out of reach, crowdfunding can be a helpful tool. However, the largest downside to relying on this alternative is donor participation. Without enough donors, your likely not going to reach your goal of raising enough money.

    Guaranteed Issue Life vs Alternatives

    GI vs AlternativesPrimary Pros:Primary Cons:
    Guaranteed Issue Life
  • Guaranteed approval
  • Fast application process with instant approval
  • Can be expensive coverage
  • Low coverage amounts
  • 2-year graded death benefit
  • Term Life Insurance
  • Inexpensive coverage
  • Large death benefit amounts available
  • Plans are not permanent
  • You'll need to take a medical exam
  • You can be turned down
  • Term Life Insurance
    (No Medical Exam)
  • Inexpensive coverage
  • You don't need to take a medical exam
  • Limited qualification ages (18-65)
  • You can be turned down for certain pre-existing health conditions
  • Accidental Death Insurance
  • Guaranteed acceptance
  • No medical exam required
  • High coverage amounts available
  • Only pays on accidental death
  • Does not cover health related deaths
  • Final Expense Insurance
    (Simplified Whole Life)
  • Much more affordable than GI
  • Larger death benefits available
  • Permanent protection
  • You can be turned down
  • Coverage is more expensive than term policies
  • Funeral Insurance
  • Final expense coverage
  • Higher amounts than GI coverage
  • Lifetime protection
  • May require you to name funeral home as the beneficiary
  • Can be expensive if not researched
  • Pre-Need Funeral Contracts
  • Allows you to plan all funeral arrangements
  • Cost is backed by contract
  • Only covers your funeral expenses
  • Non-transferable to other funeral homes
  • Crowdfunding Campaigns
  • Does not cost any money
  • Can raise a large sum of money depending on donors
  • Requires donor participation
  • Frequently Asked Questions About Guaranteed Issue Life Insurance

    As we get close to closing out this article, we are hopeful that we were able to provide you with the absolute best online guide to understanding guaranteed issue life insurance.

    If there was anything that we missed, please be sure to reach out to us so we can get you an answer to your question. In the meantime, below is a FAQ section where we have listed some great questions about guaranteed issue life insurance from current clients.

    Is owning multiple guaranteed issue life insurance plans allowed?

    Owning multiple guaranteed issue life insurance policies should not be an issue in most cases. The only time it would be a potential problem is if the total coverage amount between all policies was greater than the maximum allowable death benefit offered by the insurance provider.

    For example, let’s say you applied for an AIG guaranteed issue life insurance policy with a death benefit of $15,000. One year later, you decide to apply for another $15,000 in guaranteed approval coverage with AIG. This would not be allowed since the total death benefit would be over $25,000, which is the maximum amount the insurance company offers on their guaranteed issue policy.

    An alternative would be to lower the coverage amount on the second policy to $10,000, which would meet the $25,000 allowable limit with the insurance provider. A second alternative would be to purchase a second policy with an entirely different company, allowing you to get the $15,000 of coverage.  

    Is guaranteed universal life insurance and guaranteed issue insurance the same thing?

    No. Although both use the word “guaranteed,” these two types of life insurance coverage are very different. Guaranteed universal life policies, aka GUL for short, are their own type of coverage under permanent life insurance. These plans require full underwriting, and you can be turned down for a policy if you are classified as too high of a risk for insurability. It doesn’t offer guaranteed acceptance.

    The “guaranteed” part of a guaranteed universal life policy is related to the death benefit payout. As long as you pay your required premiums, the coverage guarantees that your beneficiary will receive the full death amount if you die. 

    Guaranteed universal life policies offer an entire lifetime of coverage at the most affordable rates for a permanent life insurance plan. Premiums will be locked in, and you can often choose the amount of coverage that fits your insurance needs as these plans are often available as low as $25,000 and range well into million-dollar policies.

    Unlike the other forms of universal life coverage and whole life insurance, guaranteed universal life policies build very little if any cash value at all. That’s what keeps the rates affordable since they don’t require an additional premium to build a cash value.

    Guaranteed universal life policies are generally double the cost of what you would typically pay for a term policy but much less expensive than any of the available permanent life insurance plans.

    Should I contact a life insurance agent for help?

    It is never a bad idea to work with a licensed and experienced life insurance agent when shopping for life insurance coverage, especially if you are unsure about buying the right amount of coverage or type of coverage.

    A life insurance agent can learn about your life insurance needs through a simple conversation and make recommendations on coverage options and coverage amounts.

    Another benefit to working with a life insurance agent is if you have any pre-existing health conditions. While guaranteed issue plans are a valuable life insurance option and serve as a means of coverage to many, they should really only be purchased if you cannot qualify for a traditional life insurance policy.

    A life insurance agent will be able to check all available coverage options available before making a recommendation for a guaranteed issue plan.

    Also, life insurance agents should never charge anyone seeking help as they are paid a commission from the insurance provider. So, if you’ve been thinking about using an agent to find a policy but were worried about cost, you don’t need to be. There’s no charge to you to use an agent. Plus, your policy will be the same price whether you buy it with an agent or on your own.

    Before you buy a guaranteed issue policy, reach out to the agent and see if they can help you find a term policy that will meet your needs better.

    Are guaranteed issue life insurance policies worth it?

    Yes. There are several times when it makes sense to have a guaranteed issue life insurance policy. If you’re unable to qualify for another type of policy, they can provide security and help to your family when you pass away.

    It’s always better to have some life insurance than no life insurance, especially if your passing would cause financial burdens on your loved ones. Guaranteed issue life insurance policies can pay your final medical expenses, funeral costs and might even be enough to leave a small amount of remaining money to your beneficiary.

    Final Word

    Guaranteed issue life insurance policies can help pay your final expenses. In some cases, they’re the best option for purchasing life insurance. However, for many people, there are better options out there. Even if you have health conditions, you might be able to find a term policy that will offer you a large coverage amount at a better rate.

    No exam policies can be a good fit for people who are considered a life insurance medical exam will result in denial. A no medical exam policy can get you the coverage you need without a medical exam. If you’ve been considering going that route, you’re in the right spot.

    At No Exam Medical Quotes, we can match you with the top no exam companies. So when you’re ready to get started, fill out our quick form to get no-obligation quotes from trusted no exam companies.

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    Jeffrey Manola - Life Insurance Expert

    Jeffrey Manola - Life Insurance Expert

    Jeffrey Manola is the founder of No Medical Exam Quotes, an online insurance broker with a strong focus on helping people shop for the perfect life insurance policy. Jeffrey is both a licensed life insurance expert and content creator for the website. Before becoming a licensed life insurance agent, he served in the United States Marine Corps. He transitioned from serving his country to helping families find affordable life insurance coverage since 2009. No Medical Exam Quotes is licensed to offer life insurance coverage in all 50 U.S. States.

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