Guaranteed Issue Life Insurance
For the individuals living with pre-existing health conditions, it can seem impossible to get a life insurance plan. But there is hope with the guaranteed issue life insurance plan. It offers coverage to these high-risk individuals and any other individuals who would like to get access to life insurance. Many may think this is a bit of a risk for health insurance companies and that there would have to be a catch; well, here is a bit more about the policy.
How Guaranteed Life Insurance Works
There are different "grades" of benefits available with the policies distributed. If an individual dies within a specified period after obtaining coverage, the beneficiary will only receive a portion of the full death benefits. At times, the beneficiary might not receive any benefits if the insured dies within a contestable period. With most insurance companies offering this plan, the insured must live past the two-year period before full death benefits are given to the beneficiary.
Other insurance companies may set the premium rates higher in order to make money off guaranteed insurance policies. There are sometimes age limits set on the policies as well - usually those over 70 won't be approved.
Since guaranteed life insurance is a permanent life insurance policy, or whole life insurance, the premiums are higher - this is especially so because no one can be denied. Usually after the first couple of years, the insured's policy begins to accumulate cash value. The premiums pay for the coverage and the rest goes toward the cash value. The premiums never change and the death benefit stays the same throughout the policy. There are exceptions to look out for - if you die in an accident, the death benefits may be paid, but if you find out you only have a couple of months to live, the policy may not help you.