Guaranteed Issue Life Insurance
Reader’s Question:
I heard about this guaranteed issue life insurance that I can get here in Kansas. What are the stipulations and limitations of this type of life insurance policy?
Lars
Overland Park, KS
Guarantee issue life insurance looks as if an extraordinary offer because you don’t have to take medical tests to qualify for coverage. But all the convenience of having a guaranteed issue life insurance has various stipulations and limitations. This type of life insurance plan normally has a value of $5,000 to $50,000. A number of guaranteed issue life insurance policies are complicated and would offer you the chance to make the total coverage bigger with cheap and practically speaking, useless accidental coverage that would be twice or thrice as much as your total benefit when you die in an accident. But the drawback in this is that an enormous majority of life insurance claims are not because of accidents and it continues to lessen as the policyholder grows older.
Another drawback of guarantee issue life insurance is that the premiums are higher than the usual life insurance plan. So if you are in perfectly good health, you don’t have to get guaranteed issue life insurance in Kansas since the costs is much higher than if you take a life insurance plan that has medical exam. Also, the death benefits are generally restricted to a return of premium of the life insurance plan plus interest during the first two years of the effectivity of the plan, except if the policyholder passes away due to accident.
Lastly, some of these guaranteed issue life insurance advertisements are misleading since there’s no definite guarantee that you would be qualified for this life insurance policy. In most instances, the applicant would still have to answer some general health questions, thus making the life insurance company capable of sorting out those high risk applicants.