Is Guaranteed Acceptance Life Insurance for You?

In this article...
  • Learn about the guaranteed acceptance life insurance you see advertised on TV. Find out how it works and who is most likely to benefit from its coverage.

Many television stations run commercials for guaranteed acceptance life insurance. Often, the ads target older adults and say how easy it is to get a policy. The benefits described may sound too good to be true, leaving you wondering what the catch is. Like any type of insurance, guaranteed acceptance life does have many potential benefits and some potential drawbacks that you need to understand before you buy.

What Is Guaranteed Acceptance Life Insurance?

Life insurance companies usually take health into consideration when underwriting applications. They usually require a medical exam to assess your health status. If you have a disease or condition, the insurance company may charge you more for your premiums or decline coverage entirely.

Guaranteed acceptance life insurance eliminates the medical exam from underwriting and is available to people who have chronic conditions that would usually disqualify them for coverage. It's usually available to people within a set age range, such as 50 to 80 years old.

What Is Easy Acceptance Life Insurance?

Easy acceptance life insurance is what some life insurance companies call guaranteed acceptance life. You may also see this type of insurance referred to as guaranteed issue life insurance.

What Is Guaranteed Coverage Amount in Life Insurance?

A guaranteed coverage amount is the largest death benefit that a life insurance company will give you without a medical exam. Most guaranteed acceptance life insurance policies let you choose from death benefits up to a set limit. This is the guaranteed coverage amount.

Does Guaranteed Acceptance Life Insurance Cover Everyone?

No, to qualify for guaranteed acceptance life, you usually need to meet the policy's age requirement. Although no medical exam is necessary, some medical conditions and circumstances may make you ineligible for coverage, such as:

  • Diagnosis of a terminal illness that gives you a life expectancy of 2 years or less
  • Previous organ transplant or need for a transplant
  • Dialysis
  • Alzheimer's or dementia
  • Residing in a hospice center or nursing home
  • Cancer, except for some types of skin cancer
  • HIV and AIDS
  • Being wheelchair-bound due to a chronic illness or disease

Benefits of Guaranteed Acceptance Life Insurance

Benefits of guaranteed issue life include:

  • Access to life insurance. Many people who can't qualify for other types of life insurance can get insured through guaranteed issue policies.
  • Quick and simple process. Approvals for guaranteed acceptances don't take long, and you won't have to undergo a medical exam.
  • Permanent solution. The insurance is typically whole life insurance that lasts until you die.
  • Cash value. Some guaranteed acceptance life builds up a cash value over time. You can use the cash value to secure a loan or to cover expenses, such as the cost of long-term care.

Drawbacks of Guaranteed Acceptance Life Insurance

There are a few downsides to guaranteed acceptance life insurance.

Waiting Period

With most whole life insurance, you're covered from day one. If you die early in the policy, the insurance company still pays at least some of the death benefit.

Guaranteed acceptance life insurance works differently. When the policy takes effect, you enter a waiting period that usually lasts 2 to 3 years. If you die during the waiting period, the insurance company won't pay the death benefit. Instead, the insurer refunds the premiums you paid to your beneficiaries and adds interest. 

Limited Death Benefit

Insurance companies cap the available death benefit size for guaranteed acceptance life. With most companies, the most you can get is $25,000. You may not be able to take out enough life insurance to fully protect your loved ones.

Higher Cost

The monthly premiums for guaranteed acceptance life are usually higher than what you'd pay for a term life or standard whole life policy that involves medical underwriting. As a result, you should see whether you qualify for other types of life insurance first. Not every policy excludes all health problems. You may find one that will insure you despite your chronic condition.

Alternative to Guaranteed Acceptance Life Insurance

If you simply want to ensure that your loved ones can pay for your final expenses, burial insurance may be a more cost-effective option. Burial insurance is life insurance that pays a limited death benefit like guaranteed acceptance life. Normally, no medical exam is required, and the policy doesn't have a waiting period.

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