The price of other types of life insurance will vary depending on factors such as age, hobbies and medical conditions. Guaranteed issue life insurance policies have fixed prices that are determined by your age at the time you apply.
Guaranteed issue life insurance is designed to solve specific problems. If you're not among these people, it's likely a mistake to make.
For the same 60 year old, a 10-year policy of life insurance with ten-fold coverage would run about $60.
Most life insurance companies will give a refund of your premiums instead of the death benefit if you die in the first few year of your policy. Investopedia reports that this practice is not intended to prevent the immediate payment of large amounts to critically ill people who sign up for a policy to ensure their loved ones receive a death benefit.
Most life insurers will issue a refund to beneficiaries if your death occurs within the first years of your policy. Investopedia claims that this practice does not prevent you from getting a large payout for someone who is critically ill.
Guaranteed issue life insurance has one main advantage: you won't have to turn down. It is also extremely convenient, compared to other types of life insurance. There is a simple application and no medical questions.
If you are not suffering from severe health issues, buying traditional policies will likely save you significant money.
Guaranteed-issue life insurance covers people who have specific health issues. This makes it the most expensive type. A 60-year-old can pay upwards $150 per month. In contrast, death benefit amounts are very low at $25,000 and $25,000.
So, what's there not to love? There are high costs, limited coverage, and "graded" death benefits.
You can probably save substantial money by buying a more traditional approach, unless you have severe medical conditions that make purchasing other policies impossible. For example, a 70 year old female could pay $18,700 over 10 years for a guaranteed life insurance policy with $20,000 of coverage. Over ten years, a $20,000 life insurance policy would cost her $12,000.
Guaranteed issue life insurance can be a good option for individuals who have difficulty qualifying for traditional life insurance due to age or health issues. However, because of the higher premiums and limited coverage, it is important to consider whether it meets your financial goals and needs.
Eligibility typically depends on your age, with policies often available to individuals between the ages of 50 and 85. The requirements may vary by insurer, but medical underwriting is not part of the application process.
Coverage amounts for guaranteed issue life insurance are generally lower than traditional life insurance policies, ranging from $5,000 to $25,000, depending on the insurer. This is often intended to cover final expenses such as funeral costs.