Last updated: August 17th, 2022
Reviewed by Lisa A Koosis
Table of Contents
When you’re in the market for life insurance, the option of guaranteed life insurance probably sounds great. You don’t have to answer health questions and no medical exam is required. You just need to apply and get approved.
However, this convenience carries a higher risk to the insurance provider. As a result, you’ll end up paying a lot more for the same coverage compared to other life insurance products.
There’s no need to worry. We’ll explain everything about guaranteed issue life insurance. When you finish reading this article, you’ll know whether this type of life insurance is right for you.
As the name suggests, a guaranteed issue life insurance policy provides life insurance coverage, regardless of your health or financial history. This policy may also be called a guaranteed acceptance whole life insurance policy. This type of life insurance is generally available to individuals between the ages of 50 and 85, though some companies may provide coverage for people as young as 450 while others won’t approve coverage for someone older than 80.
Guaranteed issue whole life insurance doesn’t qualify you based on your health. The price for a 50-year-old in supreme health is the same as for a 50-year-old with a long history of health conditions. Consequently, if you’re in good health, you could save a lot of money going with a traditional final expense life insurance policy instead.
No life insurance type is perfect for everyone. Here are some of the pros and cons of guaranteed issue life insurance:
In many cases, whole life insurance only requires you to pay premiums for a designated period of time, though other payment plan options may be considered. After you’ve paid for the policy, you have lifetime coverage. Your beneficiaries will receive death benefits when you pass away. Whole life policies also have a cash value, and they may pay dividends.
Guaranteed issue life insurance requires you to keep paying premiums, which stay the same. You have coverage as long as you pay the premiums. In some cases, a cash value policy may be an option, though not all guaranteed issue life insurance policies earn cash value.
A guaranteed issue life insurance policy is more expensive than other products. This is primarily because there are no medical exams or health questions involved. As a result, it’s most popular for individuals with less than average health.
The sample rates below are for guaranteed issue life insurance for men:
| Age | Coverage | Company | Price |
|---|---|---|---|
| 45 | $25,000 | Great Western | $134.17 |
| 50 | $25,000 | Gerber | $108.86 |
| 55 | $25,000 | Gerber | $143.46 |
| 60 | $25,000 | Gerber | $158.36 |
| 65 | $10,000 | AIG | $84.15 |
| 70 | $10,000 | AIG | $98.18 |
Guaranteed acceptance life insurance is more expensive than other alternatives. Therefore, it’s most common for seniors or people who are considered high-risk.
When Are You Considered High-Risk?
The most common reason to be considered high-risk is primarily because of health or health history. If you’re diagnosed with a serious health condition, such as some types of cancer, you’ll be considered high-risk for many years to come. Other reasons to be flagged as high-risk are dangerous professions or hobbies. Skydiving or deep-sea diving are just two examples.
If you’re a high-risk individual, a guaranteed issue policy can be a good option. However, most guaranteed acceptance products do have a graded benefit duration of 2 years. For that reason, your beneficiaries won’t receive your full coverage amount during this period. Instead, they’ll receive your paid premiums, plus a certain amount of interest. A guaranteed issue policy can provide up to $40,000 of coverage (and sometimes more). This is enough to pay off debt, pay for funeral costs, or leave a small inheritance.
A life insurance company can have stellar performance when it comes to term life insurance. But that may not be true for their guaranteed acceptance products. Perhaps they don’t offer guaranteed insurance at all.
We chose the following companies based on our extensive experience.
The best guaranteed issue life insurance companies are Gerber, AIG, and Great Western.
| Gerber | AIG | Great Western | |
|---|---|---|---|
| Age | 50 - 80 | 50 - 80 | 40 - 80 |
| Coverage | $5,000 - $20,000 | $5,500 - $25,000 | $2,500 - $40,000 |
| Graded period | 2 years | 2 years | 2 years |
| Availability | All 50 states | Not in New York | Not in New York |
| Compare rates for these companies | |||
Compare rates for these companies, which we put at the top of our list.
#1 Gerber: If you’re between the ages of 50 and 80, you can choose from $5,000 to $25,000 in guaranteed issue life insurance coverage. The Gerber Life Insurance Company application process is simple and easy. No medical exam is required, and there are no health questions to answer. Your acceptance is guaranteed, regardless of your health.
#2 AIG: AIG Life Insurance Company offers $5,000 to $25,000 in coverage. This coverage is available for individuals between the ages of 50 and 80. The company’s application process is easy and fast. Most cases have no waiting period. You also can’t be turned down for health reasons.
#3 Great Western: Great Western Life Insurance Company offers some of the highest coverage for individuals aged 40 to 85. Typically, the limit is $40,000. However, in some circumstances, the company may offer up to $48,000 in coverage.
Great Western is 10-25% more expensive than Gerber or AIG because its policy is unique. If you can answer three medical questions with “no”, you can get additional coverage.
Great Western’s guaranteed issue life insurance also includes two additional benefits:
Guaranteed acceptance policies don’t take long to go into effect. Typically, they can be active in less than 48 hours. Some companies issue your policy the same day with no waiting period. There’s no medical exam or health questionnaire to evaluate with this type of instant issue life insurance. As a result, the underwriting process is simple and fast. However, while your policy can be active the same day, there will be a graded benefit period most of the time.
What Is a Graded Benefit Period?
A graded benefit period is a duration of time during which the life insurance policy doesn’t pay the full coverage amount. If the insured were to pass during this time, the beneficiary would receive all paid premiums, plus interest (typically 10%).
The best alternatives to guaranteed issue life insurance are term life insurance, traditional final expense life insurance, and accidental death insurance. The alternative that’s best for you depends on your age and your health.
`Final expense is the a common life insurance option for healthy seniors. It’s a whole life insurance policy. As long as you make the premium payment, you’ll stay insured.
Did you know Gerber sells life insurance? Yes, the baby food company. Not only does it sell life insurance, but its guaranteed acceptance whole life insurance product is the best no-questions life insurance you can get.
Other good no-health-questions products are offered by AIG and Mutual of Omaha. The company that has the best rates changes from year to year. Right now, Gerber is the best-priced. Gerber also has great children’s life insurance and accidental death products.
As you might expect, the application is short. It’s just one page because there are no health questions.
If you pay monthly via ACH, you’ll get an 8% discount on the price.
Product details:
The main feature when comparing these products is price.
Discounts are rarely offered for monthly payments. Usually, discounts are available for annual payments. If you pay monthly via ACH bank draft, that resulting 8% discount is a welcome perk.
The only negative regarding Gerber life insurance products is the confusion caused by the name of the company. People may be familiar with the Gerber children’s life insurance policies, but not the guaranteed acceptance product for seniors.
We make shopping for life insurance as simple as possible. You can shop online, or we can assist you in finding the best policy from the best company, based on your situation.
Brian Greenberg is the founder and president of Insurist. He has been a member of the Million Dollar Round Table since 2013, a designation for the top 1% of financial advisors worldwide. Brian is a licensed agent in all 50 states for life, health, medicare, disability, auto, home, renters, and business insurance.
Lisa worked as a medical claims specialist for five years, adjudicating claims, developing appeals training programs and liaising with insurance auditors. As a full-time freelancer, she now completes work that includes writing and fact-checking life and health insurance content for a variety of online publications.
