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How to find the best guaranteed life insurance companies

Jul 26, 2023 4 Minute Read

Do you or someone you know need life insurance but don’t qualify for traditional policies? Guaranteed issue life insurance might be the solution.

Whether you’ve aged out of certain types of life insurance or have a medical condition that prevents you from qualifying, this type of policy can provide peace of mind knowing you can provide financial support to loved ones after you pass.

In this article, we’ll cover what to consider before applying for a guaranteed life insurance policy and what questions to ask insurers to confirm you’re working with the best guaranteed life insurance company.

What to consider before buying guaranteed issue life insurance

Before you purchase guaranteed issue life insurance, it’s essential to consider a few factors.

How much coverage you’ll need

Keep in mind that many life insurance policies have low coverage limits for guaranteed issue policies. Because there are no medical exam requirements and insurers tend to take on more risk by issuing the policies, coverage amounts are often capped at around $25,000. For this reason, many people use guaranteed issue insurance to cover funerals and other end-of-life expenses.

If you plan to use life insurance to cover final expenses, our funeral planning checklist can help. End-of-life conversations are never easy, but knowing that loved ones will have enough money to cover the cost of your send-off can be well worth the discomfort.

How much you can afford to pay

While you want enough coverage to adequately protect your loved ones when you pass, you don’t want to overextend yourself financially and be unable to make payments.

If you’re on a fixed income, it may be difficult to find an affordable life insurance policy that meets your needs. Since the coverage amounts of guaranteed issue are lower, the premiums tend to be affordable, but consider talking to a licensed insurance agent to learn more about budget-friendly coverage solutions and how much coverage you can afford within your budget.

Who will receive the death benefit

When you purchase a guaranteed issue life insurance policy, the person or persons you designate as beneficiaries will receive the death benefit in the event of your passing. Typically, these are immediate family members such as spouses, children, and other relatives who your death would financially impact.

Regardless of who you choose as the named beneficiary or beneficiaries, it’s important to clarify your wishes concerning what should be done with the death benefit payout. For example, if you want your spouse to use the money to cover your children’s education debt, you’ll need to clearly communicate that to ensure the death benefit is managed as you wish.

4 Questions to ask a guaranteed life insurance company

When looking for a guaranteed issue life insurance policy, there are several questions you should ask the company to make sure that you get the right coverage.

1. Is the death benefit graded?

Many guaranteed issue companies have a graded death benefit that pays out in stages. If you pass away during the initial period, usually 2-3 years after you take out the policy, your beneficiaries will receive a percentage of the total face value of your policy or a return of premiums paid. It is important to note that many life insurance policies will pay out for accidental death, even during the graded period.

Insurance companies set their own parameters regarding a graded death benefit. So, be sure to ask your insurer about when their graded period lapses, their procedures on the graded death benefit, and how they handle payouts if you pass away prematurely.

2. Are there any medical requirements?

One of the major perks of guaranteed issue life insurance is that there is no medical exam requirement. You shouldn’t have to provide any medical history at all, which the insurer can confirm when you apply.

If you’re comfortable providing a brief health history without the exam component, some insurers offer simplified issue life insurance. This type of coverage provides slightly higher coverage limits compared to guaranteed issue and may be a fit for individuals with well-controlled health conditions.

3. How much does a guaranteed issue life policy cost?

The answer depends on the insurer and factors such as your age and desired coverage amount. To get an accurate estimate, contact a licensed insurance agent through eFinancial who can compare quotes from multiple insurers so you can find the best deal.

4. Is there another type of life insurance that better meets my needs?

While guaranteed life insurance makes sense for some, there are other types of policies available that might better fit your needs.

Whole life insurance is a popular option, and it shares many similarities with guaranteed issue policies, like level premiums and the ability to accrue cash value.

However, whole life insurance offers higher coverage limits and may be more affordable if you undergo a medical exam. Depending on your age, health status, and unique financial situation, the insurer you work with can help recommend the most appropriate policy to meet your needs and budget.

Find the right guaranteed life insurance company for your needs

At eFinancial, we understand that finding the right guaranteed life insurance company can be a challenge. With numerous options to choose from, it’s easy to become overwhelmed and feel unsure about who to trust with your financial future.

That’s why we are here to help you make the best decision for you and your family. Get started with a free quote and take control of your financial security today.