Definition of Guaranteed Life Insurance

If you need to purchase a life insurance policy, but you have had past health problems, you may have wondered if you qualify for a guaranteed life insurance policy. This type of policy helps people who would otherwise be unable to obtain coverage.

Definition

A guaranteed life insurance policy is coverage for which anyone in a certain age bracket can qualify for coverage, regardless of past health conditions.

Age Restrictions

Guaranteed life insurance policies only cover policyholders up to a stated age. If you are over the maximum age, the insurance company is not obligated to sell you a policy.

Face Value

Many policies marketed as "guaranteed life" are only available in small amounts, usually around $20,000 or less.

Term

Guaranteed life insurance policies are term policies, meaning that coverage ends after a stated number of years. Applicants over the age of 50 may only be eligible for 5- or 10-year guaranteed issue policies.

Cost

A guaranteed issue policy is substantially more expensive than a comparable term policy that requires underwriting or a medical exam. This is because those who purchase these policies typically have health problems, and are more likely to die during the policy term.

References

• "Hondros Ohio Life, Accident and Health Pre-Licensing Coursebook;" Hondros College; 2002
• Insure.com: The Basics of Guaranteed Issue Life Insurance