Guaranteed Issue Life Insurance Policies

In this article...
  • This article explains what guaranteed issue life insurance means and how it can help cover final expenses even for people who can't pass a medical exam.

Older adults or those looking for a life insurance policy that won't require a medical evaluation may wish to consider guaranteed issue life insurance. These policies are also known as guaranteed acceptance life insurance. 

What Is a Guaranteed Issue Life Insurance Policy? 

Guaranteed life insurance refers to policies that don't require applicants to undergo medical exams or complete health questionnaires. In other words, insurance companies are almost certain (or guaranteed) to issue these policies, although there are some exceptions. Guaranteed issue policies can be purchased by older adults and even people with underlying health conditions. 

These policies are a type of whole life insurance, meaning they do not expire after a set amount of time (like a term life policy). As long as the premiums are paid, the policy will remain active. 

What Does Guaranteed Issue Amount Mean?

The guaranteed issue amount refers to the policy amount a life insurance company will offer without requiring that the insured person complete a medical screening. The policy amount is how much money the insurance company will pay the named beneficiary when the insured person passes away. 

The policy amount, or benefit, on guaranteed issue policies is typically lower than many other types of life insurance policies. The maximum benefit available is usually no more than $25,000. 

Guaranteed issue life insurance policies cover end-of-life expenses like funeral costs, medical bills and outstanding debts. These policies are a type of "final expense insurance." They don't, for example, offer large payments to cover the future care or education of a beneficiary.

Who Should Consider Purchasing Guaranteed Issue Life Insurance? 

Guaranteed issue policies may be a good option for people who wouldn't pass a life insurance medical exam due to age or health. Even people who have been denied other life insurance coverage may be able to purchase a guaranteed issue policy. This insurance can help ensure that loved ones are not left responsible for funeral expenses or medical debts. 

While guaranteed issue policies are usually easy to get, they may not be available to:

  • People with certain health conditions like HIV 
  • People with a terminal illness
  • People who reside in a nursing home 

Some insurers require that policies be held for at least two years before they'll pay the total benefit amount. If the insured dies before the two years, the insurance company may refund the premiums already paid on the policy instead of paying the policy amount. 

Premiums for guaranteed issue life insurance are usually higher than for other types of life insurance. Some are over $300 per month. Therefore, this kind of insurance may not be the best option for younger or healthy people who are eligible for other types of life insurance. Additionally, since the benefit payment associated with these policies is low and only intended to cover final expenses, these are not a good option for people who need more significant life insurance to provide for minor children or other family care.