Should You Consider A Guaranteed Issue Policy?
Have you ever seen advertisements for guaranteed life insurance products? If so, you may have some questions about how these types of policies can possibly work. After all, if insurance companies just issue policies to everybody, won't they lose a lot of money? Actually, you should not spend a lot of time worrying about how life insurance companies profit. They know how to design policies that make them a lot of money!
What is guaranteed life insurance for seniors? I mention senior citizens because a lot of the marketing for these products is aimed at folks over 50. Seniors life insurance is a bit different than life insurance for younger people.
By saying the policies are guaranteed issue, the companies mean that applicants will not have to answer any questions. If you have some health issues, as many older people do have, you may be very interested in this feature.
Be sure you research any policy you plan to purchase. Even though applicants do not need to answer a lot of health questions, they should know that insurance companies are protecting their investments very well.
Health questions, and other forms of health underwriting, help insurers minimize risk. Insurance is all about risk. Of course, life insurance companies will set premiums higher for these policies. They take a bigger risk. Insurers understand that these policies will be very attractive to individuals who would rather not answer a lot of questions about their health.
Insurers may also impose something called a graduated death benefit. This means that the insured person must survive a certain length of time before full benefits will be paid out. This period of time is called a waiting period.
They never really talk about this waiting period in the frequent ads that I see on my TV. That is why I thought it would be useful to educate people about how these types of plans work!
Every company will have polices with distinct rules. A typical waiting period could be two to three years. If the insured person does not survive the waiting period, the policy will not pay out the full amount. The beneficiaries may get something. Sometimes these policies will even refund premiums or pay a partial death benefit. It is important to understand how any policy works before you buy it.
Even if you have some health issues, you can probably still qualify for a simplified issue policy. You may get an immediate death benefit, and it may cost less money. Some policies, called simplified issue policies, ask a few health questions. But most older people can still qualify for them. If you do qualify for simplified issue life insurance, it will probably give you more value. If you cannot qualify for simplified issue policies, then you may want to consider a guaranteed issue policy.
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