For individuals who may find it difficult to qualify for traditional life insurance due to medical conditions or lifestyle choices, guaranteed acceptance and simplified issue life insurance policies offer valuable alternatives.
Simplified Issue life insurance is designed for those who may not qualify for fully underwritten policies but are in reasonably good health.
Key Features:
Requires answers to basic medical questions, but no medical exams or reports.
Coverage amounts typically range from $1,000 to $150,000.
Available term options include:
10-year term
15-year term
20-year term
25-year term
Term to age 100
Term-to-100 and whole life policies provide lifetime coverage with guaranteed fixed premiums.
Some permanent plans offer:
Cash surrender values
Reduced paid-up insurance
Many policies include an accidental death benefit equal to 1 to 5 times the base coverage amount.
Living benefits may be available, offering up to 50% of the death benefit in the event of a terminal illness (life expectancy under 12 months).
Non-smoker discounts typically range from 20% to 40%.
Guaranteed Issue (or Guaranteed Acceptance) life insurance is available with no medical questions or exams, making it the most accessible but also the most expensive option.
Key Features:
No medical questions or exams required.
Coverage amounts range from $5,000 to $25,000.
Premiums and face amounts may be guaranteed for life.
Accidental death benefit may provide an additional 1 to 5 times the base amount.
Deferred benefit: If the insured dies from natural causes within the first 24 months, premiums are refunded with interest. Full coverage begins in the 25th month.
Living benefit often included—up to 50% of the death benefit paid out if diagnosed with a terminal illness.
Pricing and Risk Correlation:
The fewer medical questions asked, the higher the perceived risk to the insurer.
Higher risk leads to higher premium rates.
More comprehensive underwriting typically results in lower premiums.
Simplified Issue is ideal for individuals with past medical issues that are now stable.
Example: A person who had a stent installed 3 years ago, with no ongoing treatment or changes in medication, may qualify.
Guaranteed Issue should be considered a last resort due to:
Higher premiums per $1,000 of coverage.
Deferred benefit for the first 24 months.
However, it provides a crucial opportunity for individuals who are unable to qualify for any other type of coverage.
This Medicare information section is here to educate you about your insurance options and provide you with the resources you need to help you select the right plan for your unique needs.
If there’s anything you need or if you have any questions, please feel free to contact us. We are here to help.