Guaranteed Issue Life Insurance

"Beware of the Clause"

Guaranteed Issue life insurance is guaranteed to be issued. The company won’t turn you down for coverage.

One of the downsides to purchasing Guaranteed Issue Life that we’ll ponder here is what is known as a “graded benefit clause.”

A Guaranteed Issue Life Insurance policy is also known as No medical exam life insurance with no questions asked, see the link to get a very general overview of how no exam policies work and if they’re right for you!

Okay moving on……

Purchasing life insurance can be a lifetime commitment. However, Guaranteed Issue is mostly marketed to the elderly and or people who are not in the best of health simply because there are no exams and no questions asked, which is pretty convenient if you’re not in the best of health.

But there are some disadvantages………

The Graded Benefit Clause –What is it?

Guaranteed issue life insurance rates are higher and it also has a lower death benefit than a standard life insurance policy (one that asks for exams, health info, etc…).

To learn more about these downsides, you can read more here on:No Health Exam Life Insurance - The Disadvantages

Okay… so along with those other disadvantages the guaranteed issue policy may also have a graded benefit clause.

Simply put, this clause means you have to die after x amount of years for your family to receive the death benefit. If you die before this time, then your premiums will be returned as well as any interest earned on them.

Guaranteed Life Insurance
The Clause Example

Her outlook is good; however Susan is worried for her family and decides to purchase a guaranteed issue policy, which she likes because there are no tests involved and no questions asked.

This policy of hers has a graded benefit clause of 3 years.

So what does that mean?

If Susan’s prognosis changes and she happens to die due to the cancer (pre-existing condition) before the 3 years then her beneficiary will not receive the death benefit.

In order for her beneficiary to receive the full death benefit she must live past the time stated in her contract… in this case it’s 3 years.

Be aware of the clause and what it means to you if you are looking into this type of policy.

Before you get your insurance quotes on any policy be sure to ALWAYS speak with a licensed agent to help you choose an affordable life insurance policy that will suit your needs best.

Return to No Medical Exam Life Insurance (How does it work?)

Return from Guaranteed Issue Life Insurance
to Free Life Insurance Quote Homepage