What To Expect with Guaranteed Issue Whole Life Insurance
The majority of consumers wait too long to purchase a suitable amount of life coverage, and then are surprised to find out how difficult it can be to obtain protection at an older age. Insurance companies base their premiums on perceived risk, which simply means that they are less likely to provide a policy to older individuals or consumers that have extensive medical problems. The good news is that guaranteed issue whole life insurance policies are available up to the age of 85 and sometimes older, but it is important to understand what factors to expect.
The application process of a GI policy is certainly simple and may not include any sort of medical underwriting. Several health questions may be asked, but the answers are only going to determine which type of coverage is possible to obtain. A true guaranteed issue product will not decline any applicants, but may place certain conditions on the policy. If health questions are required, a phone interview with underwriting staff may be necessary at the point of application.
The death benefit associated with such a policy may or may not be payable immediately upon the date that the coverage is in force. Some policies will only pay a benefit that is limited to a return of premiums plus interest for the first 2-3 years. These programs are often considered to be a modified death benefit policy and are fairly common for individuals with poor health. Important to note is that any accidental death will result in the whole face value being paid no matter how long the policy has been in force.
The amount of coverage that an older individual or one in poor health can obtain is often much less than most people realize. The exact limit is going to depend on the insurance company, but most of them strongly base their limitations on the age of the policyholder upon issue. Common limits are anywhere between $10,000 and $25,000, although higher levels may be possible if several conditions are met.
Insuring consumers that are older and have significant health problems is a risky business, and as a result many companies will not offer a guaranteed issue product. However, there are plenty of insurers that will help a consumer obtain the coverage necessary to take care of their final expenses. Because rates are dependent on age among other things, prospective policyholders should begin their search as quickly as possible.
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