Final Expense Benefits Guaranteed Issue Life Insurance Guide

Last Updated April 23, 2024
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Have you heard the phrase “guaranteed acceptance” and thought, what is that all about? 

Is it worth my time? Money? 

Maybe. It really all depends on your situation, health conditions, and relative status.

We at Final Expense Benefits are here for you so that you may make that informed decision for yourself, so that you and your family are prepared for the future.

Let’s not waste anymore time. 

What Is Guaranteed Issue Life Insurance?

Guaranteed Issue Life Insurance is a type of whole life insurance policy  where applicants are accepted regardless of their status.

Guaranteed issue Life Insurance also offers no medical examination, nor any background check you are truly accepted regardless of your status.

You may be thinking, this sounds too good to be true. What’s the catch?

The “catch” involves the presence of a mandatory two year waiting period, as well as the relatively high premium compared to your maximum coverage amount. 

What’s potentially worrisome about this waiting period, is that it does not contain a graded benefit where your beneficiary is entitled to compensation if death occurs before the end of the two year waiting period. 

 

This means that if death occurs prematurely, no benefit will be paid to beneficiaries, rather, they’ll receive all premium payments made before the unexpected circumstance. 

The specific reasoning for these stipulations involves the relative risk this imposes on the company, as if these restrictions didn’t exist, everyone could apply for guaranteed acceptance and they could secure upwards of $50,000 in coverage on their deathbed in hours.

You are automatically considered a “risk” when involved with a guaranteed issue life insurance policy, regardless of your actual medical conditions. 

It Can Go By A Lot of Different Names

You may have heard other terms similar to Guaranteed Issue Life Insurance.

Well we’re here to assure you that they are all the same thing

Anytime you hear phrases like “guaranteed issue” or “guaranteed acceptance” they are offering you a guaranteed issue life insurance policy. 


Some other examples may include:

  • No questions life insurance
  • Guaranteed final expense insurance 
  • Any other “guaranteed” insurance type


It’s important to note that other insurance types may also fall into this category, such as final expense insurance – the bottom line is that if you’re accepted no matter what without any medical questions, it’s a guaranteed issue life insurance policy.

What’s The Process For a Guaranteed Issue Life Insurance Policy?

Like we said previously, it all centers around the fact that you are accepted regardless of your health conditions or status.

The process goes something like this.

Applying for coverage:

  • You are accepted regardless if all information is filled out accordingly. 
  • No medical exam is required.

 

Once approved:

  • So long as you continue to pay your premiums every month, this policy will remain intact.

 

Coverage Limits: 

  • Generally, these policies do not exceed $25,000 in coverage, although $50,000 policies do exist. 

 

Cash Value: 

  • Usually this policy does not contain a cash value, although it can happen.

 

Waiting Period: 

  • Mandatory two year waiting period, sometimes three. 
  • Usually does not contain a graded death benefit. 
final expense benefits guaranteed issue life insurance pie chart

What’s The Difference Between Guaranteed Issue Life Insurance and Traditional Whole Life Insurance

The only thing these two policies have in common, is the fact that they remain for the entirety of the policy holder’s life, so long as monthly premiums are paid.

The main differences between these policies involves their approach, with traditional whole life insurance preferring to screen for quality applicants whereas guaranteed issue life insurance wishes to accept all who want coverage.

What Living Paycheck to Paycheck Means For You and Your Family

The way this is portrayed is apparent in the underwriting as well as application process.

Conventional Whole Life Insurance:

  • Medical exam, or at the very least a questionnaire
  • Not everyone is qualified
  • Lucrative rate + coverage amount
  • More options

 

Guaranteed Issue Life Insurance:

  • No medical exam/questionnaire
  • Accepted regardless of status
  • Lukewarm rate + coverage amount
  • Restricted to one-two options

Do All Guaranteed Issue Life Insurance Policies Have A Waiting Period?

Simply put, yes.

If you see no waiting period being associated with a guaranteed issue life insurance policy, you need to avoid that, as someone is lying.

There will never be a guaranteed issue policy that does not contain a waiting period 

– they just cannot mutually exist. 

If a guaranteed issue life insurance policy had no waiting period, it would be the best policy in existence hands down, and everyone would be scrambling to get one. 

Although all guaranteed issue life insurance policies have a waiting period, the severity of such is at the discretion of the provider, and may change based on the company you’re applying with.

Graded Death Benefit

There’s also the presence of a graded death benefit, meaning you may be entitled to partial compensation if death occurs prematurely before the end of said waiting period. 

The relative ratio to coverage amount you may receive depends on the provider, but usually a graded death benefit goes something like this.

  • Year 1: applicable for up to 40% of death benefit.
  • Year 2: up to 70% of death benefit. 
  • After Year 2: 100$ of death benefit.

The Only Exception:

The only exception to this rule, regardless of the waiting period or graded death benefit, is if an accident occurs and the death is not the fault of the policy owner. 

All insurance companies will pay out the full face value if this occurs, even if it were to happen the very next day after the policy is instated. 

Why Doesn’t Guaranteed Issue Life Insurance Have A Medical Exam?

It inherently doesn’t go with this kind of policy, in that this policy specifically wants to accept all applicants gathering as high of a number of policies as possible. 

The insurance providers who specialize in offering guaranteed issue life insurance have already accounted for the high risk factors involved in accepting all kinds of applicants, and have adjusted a few factors as a result.

with these being:

  • low coverage amounts
  • higher monthly premium compared to other policies
  • mandatory 2 year waiting period

These policies also are only open to a specific age range, 

with that usually existing between 50-80.

Guaranteed Issue Life Insurance Pros & Cons

Although a guaranteed issue life insurance policy isn’t for everyone, it does have its pros and cons that do carve out this policies’ niche. 

If you’re looking for payouts to beneficiaries, regardless of all other aspects,

then this policy is the definitive policy for you.

Pros

  • Guaranteed acceptance
  • Does provide security to your beneficiaries
  • No medical exam

Cons

  • More expensive than another traditional whole life insurance or term policy
  • Mandatory two+ year waiting period
  • Maximums are low comparatively to other policies

When is Guaranteed Issue Life Insurance a Good Idea?

Guaranteed issue life insurance is generally reserved for those that are either:

1. In a rush to receive coverage, regardless of the price.

2. Have potential hiccups regarding underwriting,  such as pre-existing conditions, medications, health issues, bad habits, etc.

Guaranteed Issue Life Insurance has its pros and cons as does anything, and serves its purpose if you see yourself falling under this umbrella. 

Overall, if you need Guaranteed Issue Life Insurance it’s going to get the job done, but if you’re confident you could answer a medical questionnaire or undergo an examination then that will always be the more lucrative option for your pockets. 

The presence of a medical exam can be scary to some, but successfully passing said exam/questionnaire will only serve to benefit you as the rate you are given directly correlates to the information provided to your carrier. 

How Do I Get Guaranteed Issue Life Insurance?

It’s important to discuss options with your experienced licensed agent, as they’ll be able to form a strategy for you moving forward.

If you’re unsure where to find the right licensed agent for you, 

we encourage you to consider Final Expense Benefits. 

We at Final Expense Benefits partner with over 20 carriers, with:


Being some of the ones that stand out among the crowd. 

Reduce the stress involved with life insurance and let us do all of the heavy lifting for you.

You can reach us at 1 (866) 311-4338, and we’re open from 9-5, Monday through Friday.

Alternatives To Guaranteed Issue Life Insurance

There are plenty of alternatives when attempting to prepare for final expenses. 

No matter which route is best for you, we encourage you to do what you can to prepare for final expenses, as the average funeral cost in America is close to $8,000 in 2022

Below we’ve detailed a few alternatives close to our hearts, as we specialize in connecting individuals to policies that best fit their needs and specifications. 

Final Expense

Final expense insurance is the type of insurance that’s in place to cover the funeral costs after your passing.  

While final expense coverage is generally used to cover funeral/burial costs, one may use the funds in any way desired. 

Final expense coverage usually exists as a simplified issue plan, meaning that you are approved regardless of any previous medical conditions, 99% of the time

The premiums are also generally low (depending on the condition of the applicant) and whole life, meaning that your rate does not change within the span of your lifetime. 

Additionally, these plans can coexist with Medicaid, depending on your total assets. If said assets are too high to qualify, one may withdraw and use these funds to purchase additional coverage or what have you, maximizing your beneficiaries’ payout.

Term

A Term Life Insurance policy is a policy that exists in terms, requiring that you renew it when it expires. 

The terms generally exist in 5 year increments

This policy type has an immediate death benefit, and a medical exam. Term life insurance with no waiting period contains the most lucrative rate relative to your monthly premium.

Prepaid funeral plan

A pre-paid funeral is an agreement with a funeral home that allows you to plan your funeral ahead of time. 

They’ll offer you a total price for your plan and different payment options

Typical payment options include paying it in full upfront or over the course of three, five, or ten years.

Prepaid funeral expense plans safeguard against inflation, which is one of its most appealing features.

You’ll notice elements in the agreement that are “guaranteed,” which implies the cost of your plan is assured to be completely reimbursed regardless of future costs.

What Questions Can I Expect On a Medical Exam/Questionnaire?

It’s important to provide some context.

Not all insurance providers are going to ask you the same questions on your medical questionnaire, also known as underwriting

In fact, insurance providers specialize in different facets of health, with some catering to a specific group of individuals. 

The three most important things to keep in mind when answering any underwriting questions:

  • Medical history / pre-existing conditions.
    The presence of medical history and pre-existing conditions go hand and hand, and the insurance provider is aiming to prepare themselves for any unforeseen circumstances associated with your history.  
  • Bad habits.
    Things like tobacco use, medication, obesity, etc. These all directly relate with a shorter life span and therefore incur a higher risk on the company.
  • Family Medical History.
    Any meaningful mental or physical conditions that your family may have had, as a plethora of conditions are genetic and may appear later in life.

You’re also never locked in with an insurance provider until you accept your policy, so it’s important to understand that you have other options if a specific provider isn’t working with you as well as you’d like.

Our Top 3 Best Guaranteed Issue Life Insurance Companies
  1.  

Coming in at #1, we have mutual of omaha. Coverage is applicable as early as 45, and boasts a solid rating by AM Best and the NAIC, implying superior financial strength and an overall low index of complaints.  They also feature the premiere, least expensive premium in the guaranteed issue life insurance industry.

Monthly Premium: $42.70 *

AM Best Rating: A+ (superior)

NAIC Rating: 0.87 (superior)

Company Code: 71412

  1.  

Our 2nd pick for Guaranteed issue life insurance, AIG offers the lowest overall monthly premium, although at the reduction of maximum coverage. AIG coverage begins at 50 and extends all the way to age 80, providing a middle ground approach to guaranteed issue life insurance. 

Monthly Premium: $53.93 *

AM Best Rating: A+ (superior)

NAIC Rating: 0.41 (top of its class) 

Company Code: 19402

  1.  

Coming in at #3, Great Western offers the most competitive monthly premium for your relative coverage amount, maxing out at $45,000 in guaranteed coverage! They also offer graded death benefits over the course of the mandatory waiting period. They also offer an accelerated death benefit rider for no extra cost.

Monthly Premium: $66.25 *

AM Best Rating: A+ (superior)

NAIC Rating: 0.81 (superior)

Company Code: 71480

* all premiums were calculated at $10,000 in coverage using a 61 year old woman, weight: 180 lbs, height: 5’4, pre-existing conditions: diabetes. Please note these are estimates only. 

What Questions Can I Expect On a Medical Exam/Questionnaire?

A guaranteed issue life insurance policy is generally going to be more expensive than other other policies with the same coverage amounts. 

Although you can always expect this to be so, you may be surprised to find out that you may be able to qualify for a guaranteed issue life insurance policy that’s relatively inexpensive. 

Below we’ve attached a table of sample rates you may see when applying for a guaranteed issue life insurance policy. 

Keep in mind that your rate may be different and we recommend discussing your options with a licensed agent you can trust. 

We encourage you to receive your consultation and cost free quote using the quoter tool on the right hand side of this screen – this will put you in contact with a specialized agent who will make it their mission to get you to the best coverage option possible.

Age
Coverage
Provider
Premium
40
$25,000
Great Western
$119.62
45
$25,000
Great Western
$134.14
65
$10,000
AIG
$85.15
70
$10,000
AIG
$98.40

These figures were obtained from the NFDA and are estimates only. For a detailed quote, please contact an agent. 

Final Thoughts

Overall, we wouldn’t recommend a guaranteed issue life insurance policy to just anyone

There is a specific individual that best fits this policy and the insurance providers are ready and willing to take on the risk associated with ignoring medical conditions.

The bottom line: Guaranteed Issue Life Insurance serves its purpose, and if you foresee yourself unable to answer a medical questionnaire or partake in a medical exam, 

then it’s a great option. 

If you can answer medical questions, though, that will always benefit you more than a guaranteed issue life insurance policy.

Frequently Asked Questions

What Does a Guaranteed Issue Insurance Policy Not Have?

A medical exam.

What is the Major Problem With Guaranteed Issue Life Insurance?

That you’re automatically deemed a risky applicant as is the nature of guaranteed issue life insurance and therefore will have a higher monthly premium and lower maximum coverage. 

What is a Guaranteed Issue Life Insurance Limit?

This is the maximum amount an insurance company is willing to ensure you until they require medical qualification. 

What is Guaranteed Acceptance Life Insurance?

It’s the same thing as guaranteed issue life insurance.

Sources

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