What is Guaranteed Issue Life Insurance and How Does it Work?

Clifford PendellWritten by Clifford Pendell
retired couple enjoying breakfast outside

Guaranteed issue life insurance is a type of whole life insurance that is available to almost anyone, regardless of their health.

Also known as guaranteed acceptance life insurance, these policies ask limited background questions, and they do not require a medical exam for approval.

To downside to guaranteed issue insurance is that it only offers limited coverage for the first two years

This article provides a more detailed explanation of guaranteed issue whole life insurance and the benefits it provides. We've also included some sample rates and a list of the best guaranteed acceptance companies for 2023.

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What Is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance, or guaranteed acceptance life insurance, is a type of whole life insurance that does not require a medical screening for approval. These policies are available to almost anyone between the ages of 45 to 85, regardless of their health or lifestyle.

Most guaranteed issue companies offer up to $25,000 of coverage with few health questions, but some providers don't ask any health questions at all. These companies mitigate their risk by enforcing a two-year waiting period, charging higher premiums, and offering smaller death benefits.

If you are permanently disabled, have serious health issues, or collect Social Security for a mental disorder, guaranteed issue life insurance is probably the only coverage you will qualify for. Being declined for term life insurance can also make you a candidate for guaranteed acceptance insurance, depending on the reason you were denied.

Guaranteed issue life insurance policies have minimal requirements and as the name suggests, your approval is almost guaranteed. In this article, we’ll review important questions to ask when shopping for coverage.

What's the Difference Between Whole Life and Guaranteed Whole Life Insurance?

Both whole life insurance and guaranteed whole life insurance provide permanent life insurance protection, but there are some key differences between the two types of coverage.

1. Health Requirements: Guaranteed issue whole life insurance is available to almost anyone over the age of 45, regardless of their health. Whole life insurance is available at any age, but you must be in insurable health to qualify for coverage. 

2. Coverage Amounts: Guaranteed issue life insurance providers offer a maximum of $25,000 in coverage. Most whole life insurance providers offer up to $50,000 of coverage, but some will offer considerably more, especially if you are willing to complete a medical exam. 

3. Cash Value: Whole life insurance policies build a small cash value overtime and this money can be accessed by the policyholder, if needed.Guaranteed issue whole life insurance policies do not build a cash value, you only pay for the cost of your coverage. 

4. Waiting Period: Guaranteed issue policies have a two-year waiting period before full coverage begins. If you pass away during this time, your beneficiary will receive a refund of your premiums plus 10%. After two years, you will have full coverage. With whole life insurance, coverage begins as soon as you make your first payment. 

While whole life insurance has a few advantages over guaranteed issue whole life insurance, it's important to note that guaranteed issue insurance is available to folks with serious health concerns while whole life insurance is not. 

Questions to Ask Your Agent When Shopping For Guaranteed Issue Life Insurance

The three key questions to ask your agent when shopping for a guaranteed issue life insurance policy are:

  1. How long is the policy’s waiting period?
  2. Will my coverage end at a specific age?
  3. Will my policy cost increase over time, or will the death benefit ever be reduced?

1. What's My Policy's Waiting Period for Any Cause of Death?

A newly purchased guaranteed issue life insurance policy will pay the entire face value right away if the insured’s death is the result of an accident (such as a car crash), or if the insured was the victim of a crime.

Most GI policies have at least a 2-year waiting period before the beneficiary can receive the full death benefit as a result of a death due to a medical condition. This waiting period begins the day you pay your first premium.

At JRC, we favor Gerber’s Guaranteed Issue policy for a few reasons. One is that the two year waiting period provides a “return of premium + 10% guarantee.” This means that if you die within the first two years of your policy, all of the money that was paid into the policy is returned to your beneficiary, plus 10% interest, guaranteed. If you look at this as an investment, it’s better than any “guaranteed” return that we’ve found.

2. What Age Will My Coverage End?

You may be surprised to learn that many “final expense” polices usually end at age 80. This could come as a big shock to you or your children down the road. With many guaranteed issue policies, you have a window of time.

Ask yourself, “Am I likely to live at least two years and pass before my 80th birthday?” If not, the products advertised on television are probably not right for you, despite the attractively low rates.

The cost of whole life policies, such as Gerber’s Guaranteed Issue, is based on mortality tables for your age and gender. The rates for this policy are guaranteed to age 100.

As long as you don’t “over commit” by purchasing a life insurance policy that you can’t afford, you’ll rarely reach the point of paying more into the policy than the death benefit received.

Insurance companies do not make much money from those who keep their policies and pay their premiums on time. Instead, they make the majority of their profit from those who cancel their policies or let them lapse by not making their payments.

This is a big reason why we urge our clients to focus on affordability rather than the death benefit. Before purchasing any life insurance policy, understand your comfortable monthly budget.

3. Will My Policy Cost Increase?

Of the GI policies that we’ve reviewed, including the majority of those pitched on TV, more than half increase their premiums every 5 years. Even though these policies are considered to be “lifetime coverage,” you’re actually buying a 5-year renewable term policy.

In fact, many of these policies double in cost every 5 years, making them impossible to budget for, especially with the increasing cost of living. They also initially offer attractive teaser rates, only to become less affordable as you get older. This is known as “pricing you out” of your policy.

After comparing the cost and benefits of each option, most of our clients choose a “fixed rate and death benefit plan.” With these types of policies, there are no moving parts. Your coverage may be a few dollars more than other policies, but you’ll save a lot of money in the long run compared to a policy with an increasing cost.

With the fixed cost policies we recommend, you can budget for the cost of your coverage for the rest of your life. We frequently receive calls from clients who can no longer afford the cost of their policy because the rates have continued to increase to the point where they have become unaffordable.

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Most of the clients that we speak with have already waited too long to purchase life insurance. Remember, the younger you are when you buy life insurance, the less expensive it will be. If you’re over the age of 80, expect to have a bit of sticker shock when receiving quotes. Buying life insurance before the age of 75 will usually cut your rates in half compared to age 80.

Depending on your budget and your need for coverage, our agents may recommend buying a little less coverage than what you may have originally intended. With life insurance, affordability is extremely important, because if you are unable to pay for the cost of your coverage, you will eventually lose it. Some life insurance is always better than no life insurance, and any amount that is left behind will be a blessing to your loved ones.

Are you aware that the current Social Security provides a one-time death benefit of only $255!

According to Bankrate, the cost of an average funeral was $7,848 in 2021. Guaranteed issue life insurance can help bridge this gap by providing your loved ones with the money they need for your end-of-life expenses.

These policies provide an untaxed lump sum that pays directly to your beneficiary when you pass away. This prevents your loved ones from being burdened with the stress of paying for your burial expenses when they are mourning your loss. 

Best Guaranteed Issue Life Insurance Companies

JRC is an independent agency that represents 63 highly-rated life insurance providers. These are our top picks for guaranteed issue life insurance:

CompanyIssue AgesCoverage
  • Show All
  • $1,000
  • $6,000
  • $11,000
  • $16,000
  • $21,000
  • $26,000
  • $31,000
  • $36,000
  • $40,000
Mutual of Omaha logo AM Best: A+ From: 45
To: 85
$2,000 -
$25,000   
Great Western logo AM Best: A From: 40
To: 85
$1,000 -
$40,000   
Sons of Norway logo AM Best: NR From: 0
To: 85
$5,000 -
$25,000   
Gerber logo AM Best: A+ From: 50
To: 80
$5,000 -
$25,000   
United Home Life logo AM Best: A- From: 45
To: 75
$5,000 -
$25,000   
AIG logo AM Best: A From: 50
To: 85
$5,000 -
$25,000   
Fidelity Investments logo AM Best: A- From: 50
To: 85
$5,000 -
$20,000   
Americo Insurance logo AM Best: A From: 50
To: 80
$5,000 -
$10,000   

Mutual of Omaha Guaranteed Issue Life Insurance

Mutual of Omaha is our #1 choice for guaranteed acceptance life insurance.

Here Are the Benefits of Mutual of Omaha's Living Promise Policy:

  • Insurance rates are guaranteed to never change.
  • Policy amounts range from $2,000 to $25,000 and are sold in $1,000 increments.
  • Available to men and women between the ages of 45 and 85.
  • No health questions are asked, and no medical exam is required.
  • Payments can be made by checking account, EFT, credit and debit cards.
  • They are rated by A.M. Best as an “A+” (Superior) Company.
  • Mutual of Omaha has been in business since 1909.
  • Coverage is offered in all states except Arkansas, Montana, and North Carolina.

Monthly Rates for Mutual of Omaha's Guaranteed Issue Policy - $10,000 Benefit

AgeMaleFemale
45$36.40$27.90
50$40.20$30.40
55$45.40$37.50
60$56.90$42.70
65$68.50$50.00
70$86.70$63.90

*Displayed monthly rates are accurate as of 03/09/2023 and are provided for illustrative purposes only.

If you’d like additional rates for your specific age or different amounts of coverage, please feel free to give us a call toll-free at 855-247-9555. You can also compare guaranteed issue life insurance quotes online using our free quote form below.

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We’re Here to Help You Make an Informed Decision

Do you have questions about what type of life insurance you should buy, or have you been turned down for life insurance in the past? JRC represents 63 top-rated life insurance companies and some of these providers specialize with applicants that are considered to be a high-risk for life insurance.

With a few simple questions, we can assess your health, and evaluate the policies available to you. Our agents offer at least 10 years of experience, and we are experts are matching our clients with their best option for affordable protection. Call us toll free at 855-247-9555. We’re here to help!

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Written by:

Clifford Pendell

Clifford Pendell

Managing Partner and Co-founder

Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.

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