Life insurance is a crucial tool for protecting your loved ones’ finances if you pass away, but qualifying for coverage can be tricky for people with complex medical histories. Guaranteed life insurance policies can help.
You can qualify for guaranteed issue life insurance if you fall within a specific age range. Life insurance companies usually offer only permanent guaranteed issue policies, which may not fit everyone’s needs.
Fortunately, many workplaces and other associations provide guaranteed term life insurance as part of their benefits package. Read on to learn more about guaranteed term life insurance and where to find similar life insurance policies.
What is the difference between term and permanent life insurance?
Life insurance falls into two overarching categories: term and permanent life. Term life policies offer coverage for a fixed period that you choose when you purchase the policy, usually between 10 and 30 years. These flexible policies often have lower premiums than permanent policies for similar death benefits. On the other hand, permanent life insurance policies last throughout your life as long as you continue paying premiums. A portion of your premium payments for permanent life insurance goes toward your policy’s cash value, which grows over time.
If you want to offer your loved ones an extra financial safety net for specific circumstances or goals, then term life insurance may interest you. On the other hand, if anyone will depend on your income indefinitely or if you want to secure coverage for end-of-life expenses, a permanent policy may be a better fit. The cash value component of permanent life can also help you cover emergency expenses during your life. Both types of policies offer options with guaranteed coverage.
How does guaranteed issue life insurance work?
Most guaranteed issue life insurance policies offer permanent final expense coverage. They have death benefits significant enough for funeral costs and other end-of-life expenses but smaller than many other policies, usually capped at around $25,000. Guaranteed issue application processes are simple. As long as you meet age requirements, you qualify. With guaranteed issue life insurance, people with complicated health histories can have peace of mind in knowing their loved ones have financial protection. Premiums also remain level through the policy’s lifetime, so it doesn’t come with surprises. Some other advantages of guaranteed issue life insurance include the following:
No medical exam
You won’t need a medical exam for guaranteed issue life insurance policies since your health isn’t an eligibility factor. In fact, applicants don’t answer any health questions, and insurance providers don’t do any medical underwriting. That makes guaranteed issue coverage a great option if you have serious health concerns or don’t feel comfortable disclosing health information.
Immediate coverage
Insurance companies can take up to eight weeks to determine eligibility for some policies. With guaranteed issue insurance’s simple applications, it should only take a few days at most. Some people even receive same-day approval, and coverage begins immediately. However, if you pass away soon after you purchase your policy, your beneficiaries may receive a reduced payout depending on your policy’s guidelines.
Guaranteed term life insurance policies
Guaranteed term life insurance policies can be challenging to find. Typically, you receive these policies through your workplace or an organization.
Many employers offer group life insurance as part of their benefits package. The companies save money by purchasing life insurance for a group, you and your coworkers, so group life policies are often free or low cost. Basic group life coverage usually has small death benefits, between $20,000 and twice your annual salary, though you can sometimes purchase additional coverage through your employer.
Individual health doesn’t usually impact your eligibility for group life insurance. If you opt into the policy, you receive guaranteed term life insurance coverage. However, the overall age demographics of the group can influence the overarching policy’s available coverage amounts, individual costs, and application.
Like all term life insurance policies, group term life insurance lasts for a fixed period. Typically, it renews each year during open enrollment. Then, if you leave your job, your group life insurance coverage ends. Sometimes you can convert to an individual policy without completing a medical exam. Still, you should expect to pay increased premiums.
Pros and cons of guaranteed term life insurance
Guaranteed term life insurance is an accessible and affordable option for term life insurance coverage. However, you might trade flexibility and control for convenience. Understanding some advantages and drawbacks of guaranteed term life insurance policies can help you make the best choice for your situation.
| Pros and Cons of Guaranteed Term Life Insurance | |
| Pros | Cons |
| Your work likely pays for all or most of your guaranteed term life policy. | You may have minimal coverage. |
| You don’t have to complete a medical exam. | When you leave the organization providing life insurance, you lose coverage. |
| You complete only a streamlined application. | You may need to buy supplemental life insurance coverage. |
| Your coverage starts right away. | You have limited flexibility; your work or organization chooses terms and coverage amounts. |
Other term policies that don’t require a medical exam
If you don’t have access to group life insurance or would prefer a policy with more coverage, you have a few options for term life policies that don’t require an immediate medical exam.
With direct term life insurance, you work directly with the insurer to apply by phone or online in just a few minutes without speaking with an independent agent or other intermediaries. Of course, licensed insurance agents working with the insurer can answer your questions if you need guidance. Then, coverage for direct term begins as soon as you’re approved, usually within days.
Fidelity Life offers RAPIDecision® Term Life Insurance, which allows you to complete your medical exam up to six months after approval for direct term life coverage. In some cases, you may even forgo it altogether. Most adults between 50 and 70 don’t have to complete a medical exam for RAPIDecision® Senior Life Term policies. Instead, you can respond to a medical questionnaire and may have to complete a medical exam if any responses need further explanation.
Alternative and supplemental policies
Maybe your work offers a free or low-cost guaranteed issue term life insurance policy, but your loved ones need more coverage. In that case, you may want to supplement your group life insurance with another policy.
While organizations sometimes offer supplemental life insurance, purchasing a policy from a private insurance company could provide you with more control over your coverage. Fidelity Life offers a few options without a complicated application or medical exam that offer quick coverage.
- Simplified issue life insurance offers coverage between $5,000 and sometimes upwards of $100,000. The application process includes a medical questionnaire that provides insight into your personal and family health history. However, you don’t have to undergo a medical exam for coverage. If you have some medical concerns or want to avoid an exam for other reasons, simplified issue life insurance could work for you. Coverage begins as soon as you receive approval and set premiums.
- If you know your medical background disqualifies you from most life insurance, you might also consider supplementing your group life policy with a permanent guaranteed issue policy. In that case, you don’t have to provide any health information at all to receive coverage, and your beneficiaries will receive the death benefit based on the terms of your policy.
Find out which life insurance policy is right for you
A guaranteed acceptance term life insurance policy could help you secure life insurance coverage at a relatively low cost, even if you have health concerns. For some, group life insurance provides enough coverage to meet their needs. However, depending on your family and financial circumstances, you might want to supplement that coverage with an additional policy.
The best life insurance provides peace of mind and financial security for you and your loved ones without breaking your budget. You can speak with a licensed life insurance agent at Fidelity Life to discuss your unique circumstances and explore life insurance options.
