Guaranteed Life Insurance: Is it a Good Choice For You?

Guaranteed life insurance is a type of whole life insurance policy without a medical exam. If you are looking for this type of policy but have certain health issues, you will be interested more in learning all its features.

Read on to find out if guaranteed life insurance can be a good choice for your future.

In this article, you will learn:

  • What is guaranteed life insurance?
  • What can guaranteed insurance cover?
  • How does a guaranteed insurance policy work?
  • Benefits and drawbacks of guaranteed life insurance
  • Guaranteed issue vs. other common life insurance policies
  • Create your financial system with Lifestyle banking!
  • Watch our masterclass!

Let’s get started.

What Is Guaranteed Life Insurance?

Guaranteed Life Insurance is a type of life insurance policy that doesn’t require you to undergo a medical exam and answer health questions. Life insurance companies will accept your application without submitting medical records and providing evidence of your health history.

As you are guaranteed acceptance regardless of your health issues, this policy is also called a guaranteed acceptance life insurance policy.

guaranteed life insurance needs no medical exam
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But, when applying for this policy, you must meet the age limit criteria. You must be between 50 and 80 years old to qualify for guaranteed acceptance life insurance.

There are more things you should keep in mind when you decide to take a guaranteed life insurance policy.

Life Insurance Coverage

Life coverage is usually between $10,000 and $25,000. Based on the lower coverage amounts, guaranteed life insurance usually covers funeral and burial expenses and medical bills.

High Rates

Guaranteed acceptance life insurance is one of the most expensive types of life insurance policies, and it has permanent coverage as long as you pay premiums. The premium rates are determined based on your age and health.

Death Benefits

Guaranteed issue life insurance pays the beneficiaries a cash death benefit of $2,000 to $25,000.

Cash Value

Guaranteed acceptance insurance creates cash value, which you can access through a policy loan if you have your premiums paid. If you don’t pay off the loan before you die, your beneficiaries will receive less money. 

What does guaranteed life insurance cover?

You can use guaranteed life insurance to finance the living expenses, such as:

  • Funeral expenses – It usually provides as much death benefit as it’s sufficient for final expenses, such as funerals.
  • Medical bills – Hospital stay costs, nursing home specialist care, and medicines
  • Debts – Personal or business loans, credit card debts, and your mortgage
  • Life expenses – Social security benefits, disability benefits, pensions, and other death benefits to cover life-daily expenses (food, clothing, healthcare)
the file showing living expenses
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Besides, you will be able to cover some specific needs for your family. For instance, you can create a savings account and emergency fund.

Now that you know what you can use guaranteed acceptance life insurance for let’s see how it works.

How Does Guaranteed Life Insurance Work?

An insurance company you choose will not look at your medical history. That makes the application process simple. But, there is one hurdle. When you apply for guaranteed life insurance, you will go through a 2/3-year waiting period until you get the policy.

Waiting period definition
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If you pass away during the waiting period, your beneficiaries will not receive a full death benefit. However, there will be a return of the premiums plus 10% interest.

In some extreme situations, the rules may differ. For instance, if you die in a car accident, the policy will pay full coverage to your beneficiaries.

Before penning the deal, we’ll also explain who should consider the guaranteed life policy.

Who should consider guaranteed life insurance?

Typically, people with a chronic or terminal illness have fewer options for purchasing an insurance policy. In this case, guaranteed life insurance can be a good choice as it doesn’t address health concerns.

You can apply for guaranteed life insurance if you have the following serious health conditions:

  • You are on dialysis
  • You need an organ transplant
  • You have AIDS or HIV
  • You have Alzheimer’s disease or dementia

Even though these are serious health issues, you don’t have to worry that the insurance company will reject your application.

However, let’s look at both the good and bad sides of guaranteed life insurance, so you can make sure to make the best choice for you.

Guaranteed Life Insurance benefits

As you want to make the best choice for yourself and your family, you should consider the benefits and drawbacks of guaranteed life insurance policies.

Guaranteed life insurance has an easy application process that’s attractive to a large number of people looking for insurance. Here are some other benefits of this type of whole life insurance:

No Medical Exam

Your application process can be easy and simple since there are no medical exams to determine risk levels and premium rates. No matter your health conditions, you will not answer any health questions or fill out a health questionnaire.

This is standard across the board, and every insurance company follows the same rule. 

Fixed premiums

Unlike some other types of life insurance policies, such as adjustable life insurance, where you can change your premiums – with guaranteed insurance, they will remain the same for as long as you are paying them. 

Life benefit option

There are two situations where guaranteed life insurance wouldn’t be a good option for you:

  1. If the paid premiums exceed the death benefit
  2. If you realize that you might qualify for another policy with health coverage, regardless of your illness

Let’s explain certain features that may keep you from purchasing this policy.

Guaranteed life insurance drawbacks

There are two situations where guaranteed life insurance wouldn’t be a good option for you:

  1. If the paid premiums exceed the death benefit
  2. If you realize that you might qualify for another policy with health coverage, regardless of your illness

Let’s explain certain features that may keep you from purchasing this policy.

The higher premiums

Even though the life insurance coverage is small, you can spend a lot more on the premiums compared to the death benefit your policyholder will receive after you pass away. Life insurance death benefits are not as good compared to some other life insurance policies.

Limited face amount

The coverage amount varies from $3,000 to a maximum of $25,000. A guaranteed issue or permanent life insurance policy will not provide you with a high death benefit. If you are older, you can expect to receive between $5,000 and $10,000; if you think it isn’t enough and are looking for a larger death benefit, explore other life insurance options. 

Waiting period

As we’ve already said, the waiting period for this life insurance is usually between 2 and three years. The downside is that you cannot get the guaranteed life insurance policy that comes without a waiting period.

The reason why this is included is to prevent potential beneficiaries of receiving the death benefit too early, as that would put a strain on insurance companies.

Now that you are aware of the downsides of guaranteed life insurance, you may wonder if this policy is the right fit for you. To make the best choice for your future, you should consider another but better alternative.

Guaranteed issue vs. Other Common Life Insurance Policies

Before making your decision, you must compare guaranteed issue life insurance with other policies.

Guaranteed Issue Whole Life vs. Term Life Insurance

Term life insurance policies are one of the most popular choices. Life insurance agents often sell these quickly, mostly because they are flexible and affordable, and beneficiaries can easily renew them once the term ends.

People who should choose term life instead of guaranteed issue life insurance are younger and healthier individuals who have families to take care of. They need to be open to doing a medical exam. This policy is characterized by a much higher death benefit.

On the other hand, guaranteed issue life insurance is for people beyond their prime years and with some health issues.

Guaranteed Issue Life Insurance vs. Permanent Life Insurance

How is guaranteed life insurance different from other types of permanent life insurance? First, permanent life insurance requires applicants to be in good health, which is the main difference. Guaranteed issue insurance can accept people with various health conditions.

Secondly. permanent life insurance allows you to create a sizeable cash flow you wouldn’t be able to achieve with guaranteed issue insurance.

Simplified Issue Life Insurance vs. Guaranteed Issue Life Insurance

A simplified issue life insurance is similar to guaranteed issue life insurance in that it doesn’t require a medical exam. However, you will need to answer some health questions to get the simplified policy.

Most insurance companies will offer this insurance as an alternative because of the higher coverage amount and fast approval.

What if none of these options is a good fit for you?

Although guaranteed acceptance life insurance is great for those with health issues, the coverage amount is small compared to some other policies, and there are some better options. 

Create Your Financial System with Lifestyle Banking!

If you are tired of different life insurance policies that set specific requirements and conditions, you will want something completely new and different.

Now, just imagine you can create your life policy and control the flow of your finances independently of the banks. Fortunately, it’s possible.

You can create an independent financial system for yourself and your family through the concept known as infinite or lifestyle banking.

You will be using your whole life insurance policy to finance your lifestyle and things you would otherwise finance through a bank. In other words, you can become your own banker.

The cash value growth within your policy is tax-deferred, and when you borrow against the cash value, it can continue to grow in your life insurance policy.

Eliminating the banks allows you to keep the money for yourself and control its flow.

Using death benefit for multiple purposes
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In the image above, you can see a lot of ways in which you can create your lifestyle. For example, you can plan to invest in your child’s education, buy a property or a car, cover the wedding costs, or finance a long trip.

Anything is possible with a system that works for you, not against you. As a result, you will have a lot more freedom, but also more options.

Another one of them is family banking. Through lifestyle banking, you keep the money within the family, which gives you the additional option of lending money to a family member, who will pay you the principal and interest in return.

Since all this sounds very tempting, we believe you will consider the concept of lifetime banking as a great way to secure your future. You already know the basics, and with additional education, you can gain financial independence as never before.