Guaranteed Acceptance Life Insurance With No Waiting Period

In this article...
  • Find out why you may benefit from guaranteed acceptance life insurance with no waiting period. Learn about the drawbacks of this type of policy before you buy.

With life insurance, those who are most likely to be concerned about the financial impact of their deaths often have the most difficulty getting coverage. If you have a medical condition or are an older adult, you may want life insurance to replace your income and pay for your final expenses. However, life insurance companies base approval decisions largely upon how likely it is that you'll pass away soon and may decline your application. Guaranteed acceptance life insurance with no waiting period is a potential solution to this problem that could help secure coverage that you otherwise may not qualify for.

What Is a Guaranteed Acceptance Life Insurance No Waiting Period Policy?

With traditional life insurance, your application goes through a rigorous underwriting process. The insurance company normally requires you to undergo a medical exam to assess your health and may request medical records from your doctor. You may be declined if you have certain medical conditions or if your job or recreational activities are risky.

Guaranteed acceptance life insurance has a simplified approval process. Most policies only have a minimum age requirement and ask you to fill out a simple health questionnaire. You don't have to undergo a medical exam. Due to the relaxed underwriting standards, people who don't normally qualify for life insurance coverage may be able to obtain a guaranteed acceptance policy.

Life insurance companies remain profitable by taking in more money in premium payments than they pay out in death benefits. If you die early on in a life insurance policy, you likely haven't paid enough in premiums to offset the cost of the death benefit. That means the insurer loses money on your policy.

To reduce the financial risk of the insurer, most guaranteed acceptance life insurance policies have a waiting period that lasts for the first two to three years of the policy. If you die during the waiting period, the insurer doesn't pay the death benefit, but it does return all the premiums that you paid into the policy to your beneficiaries. A few guaranteed acceptance life insurance policies eliminate the waiting period and will pay the death benefit any time after the policy takes effect.

What Are the Drawbacks of Guaranteed Acceptance Life Insurance With No Waiting Period?

Guaranteed acceptance life insurance policies with no waiting period do have two major downsides.

  • Higher costs. You'll pay more for a policy with no waiting period than you would for standard guaranteed acceptance life. Overall, guaranteed acceptance policies charge higher premiums than standard term and whole life insurance.
  • Limited coverage. Because the risk of loss is greater without the waiting period, life insurance companies usually place strict limits on death benefit size. You may not be able to get enough life insurance to fully meet your loved one's financial needs through a guaranteed acceptance life insurance policy that doesn't have a waiting period. Guaranteed acceptance life with a waiting period may have a slightly larger death benefit, but to get a sizable payout, you normally need to choose a term or permanent life insurance policy that uses traditional underwriting.

Can You Get Guaranteed Life Insurance?

Guaranteed acceptance life insurance is available to most people. However, you may not qualify if you:

  • Have a terminal illness and are expected to live less than 2 years
  • Need an organ transplant or had a transplant in the past
  • Live in a long-term care facility such as a hospice center or nursing home
  • Rely entirely on a wheelchair for mobility due to an illness or disease

In addition, underwriters may decline a guaranteed acceptance life insurance application if you have any of the following medical conditions:

  • Kidney problems that require dialysis
  • Dementia or Alzheimer's disease
  • HIV and AIDs
  • Most forms of cancer; insurers will usually accept people who have easily treatable forms of skin cancer

Who Can Benefit the Most From Guaranteed Acceptance Life Insurance With No Waiting Period?

Many individuals can get coverage with guaranteed acceptance life with no waiting period. But due to the high costs and low death benefit, this type of insurance isn't usually the best option. Those who might benefit the most from this type of insurance include the following people.

Individuals With a Critical Illness

If you know you have a critical illness but still have a life expectancy of a few years, guaranteed term life with no waiting period may be the only way you can get coverage and ensure your loved ones receive a death benefit if your condition progresses more quickly than expected.

Older Adults in Poor Health

Individuals with just one health condition may qualify for traditional term or whole life insurance with a higher rate than those in good health. If you have multiple health problems such as heart disease and diabetes, insurance companies are more likely to deny you coverage. Guaranteed acceptance life insurance will most likely approve your coverage, and by eliminating the waiting period, you can make certain your family will get the death benefit to pay for any outstanding medical bills and other costs.

People With Dangerous Jobs or Recreational Activities

If your occupation or recreational activities put you at risk for accidental death, a guaranteed acceptance policy may be your only option for coverage. No waiting period means your family is protected from financial loss immediately.

What Life Insurance Doesn't Have a Waiting Period?

With most life insurance, there are only two waiting periods: the time between when you apply and receive approval from the underwriter and the time between when your beneficiaries file claims and receive their death benefit.

A guaranteed life insurance policy requires a waiting period for death-benefit coverage because the underwriting process is simplified. If you opt for traditional term or whole life, you normally won't be subject to the same type of waiting period. The exception is if the insurance company adds a contestability period to your policy.

With a contestability period, the life insurance company may not provide a death benefit if you die due to certain causes. Many policies have a contestability period for suicide to prevent someone from taking out life insurance with the intention to commit suicide and pass money on to their beneficiaries. You can ask your life insurance agent if your term or permanent life insurance policy has a contestability period.

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