Guaranteed life insurance is generally targeted at those with chronic and serious medical conditions, as well as the elderly population. You've probably seen the television ads that state that no physical exam will be required when you apply for a guaranteed life policy. Guaranteed life means precisely what it says: You are guaranteed life insurance with almost no questions asked.
Simplicity
The only information required to obtain a guaranteed life insurance policy is your age and zip code, according to LifeInsuranceQuotes.com. You are not required to answer questions about your health history, nor do you have to undergo any medical tests. You will qualify for a life insurance policy regardless of your health status.
Limitations
Most guaranteed-issue life insurance policies have smaller face values than conventional life insurance policies. The typical payout is under $20,000, according to Insure.com. This modest amount is intended to cover the policyholder's funeral expenses and little more. Some insurance companies reserve guaranteed life policies only for people in the 50-to-85 age group.
Premiums
Guaranteed life insurance policies base their premiums solely on the applicants' age and gender. This, combined with the small death benefit, can make guaranteed life insurance an unattractive choice for people who are in comparatively good health. You could potentially end up paying more in premiums than your loved ones will receive when you die.
Waiting Period
Unlike traditional life insurance policies, guaranteed life insurance usually has a waiting period. If you die during this time, it's unlikely that the death benefit will be paid in full. Your insurer may choose instead to refund some or all of the premiums paid, rather than pay the full face value of the policy. Some insurers will pay a percentage of the face value if the waiting period was drawing to a close when you died.
Outlook
If you decide that guaranteed life insurance is right for your situation make sure to apply with companies with "A++" ratings. You will want to go with a reliable company to ensure that your beneficiaries will be paid in full when the time comes.
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