With September being “Life Insurance Awareness Month” (LIAM), we wanted to discuss the important subject of life insurance, but focus on a specific type of life insurance called guaranteed issue life insurance.
When folks approach us on the topic of life insurance here in Texas, the first thing we do as an independent, veteran-owned insurance agency is a comprehensive fact-finding analysis of their specific needs and background to get the full picture of possible options for that individual and their family. Perhaps someone has extensive medical issues that are generally considered an automatic decline for standard life insurance policies, due to rigorous underwriting requirements. Maybe someone has a very limited budget for life insurance and wants something that would cover simple burial/funeral expenses when that inevitable day comes, rather than having the family resort to selling BBQ plates to raise the funds.
It is instances like these where guaranteed issue life insurance might be a viable option. Simply put, guaranteed issue life insurance is a type of permanent (not term) life insurance where you can’t be turned down by the insurance company. Your acceptance is guaranteed, with no medical underwriting done on you. So for instance, if I have diabetes, and extensive heart conditions, I still would have to be accepted by the insurance company, no questions asked. Getting a policy approved and active is usually a very quick process. Benefit amounts typically range from $5,000 up to $25,000.
So what are the downsides to these types of life insurance policies? Well, they will be a bit pricey due to having to accept everyone, coverage amounts may be limited, and some policies could be subject to a waiting period, often referred to as a graded benefit. This means that full death benefits could be restricted during the first 2 years of ownership, if death is non-accidental. So if you died of natural causes during this period, your beneficiary would only receive a return of premiums payed, plus interest such as 10%. If you do pass away due to an accident during the first 2 years of ownership, your beneficiary receives the full death benefit.
Some other noteworthy items about guaranteed issue life insurance policies, is that your premiums are fixed for the life of the policy, your death benefit will not decrease over time, and age eligibility is typically from around 40-50 years old, up to 85 in some cases.
We our proud to offer some unique guaranteed issue life insurance polices, such as coverage up to $100,000 if someone is working and built-in riders where if someone gets sick and has a qualifying chronic or terminal illness, a portion of the death benefit could be accelerated early. The important message behind this post is that life insurance can be a possibility for anyone, no matter what situation they are in. And with the unpredictability that is called life, as we have witnessed in 2020 with the COVID-19 pandemic, there is no better time to secure life insurance coverage than the present.
We hope you found this blog post on guaranteed issue life insurance useful, courtesy of The Harrin Group. If we can ever be of assistance to you or anyone in your family needing life insurance here in Texas, Florida or California, we are here for you! Contact us for a free, no obligation analysis of your situation today!
See below for a real life story on the importance of life insurance⇓