When you’re looking to get life insurance protection, it can be a difficult process. There are several different factors that you’ll need to consider to ensure that you’re getting the best plan. Each type of plan has different advantages and disadvantages that you’ll look to compare based on your specific situation.
If you’ve been declined for life insurance in the past, you may have considered a guaranteed life insurance plan. These plans can be an excellent option to get life insurance protection, especially if you have severe health complications like diabetes. It’s important that you understand all of your options to ensure that you’re getting the best insurance coverage.
Guaranteed life insurance is a unique type of policy that is offered to a certain subset of insurance shoppers who are not able to get approved with most companies. This article will give you the ins and outs of how to qualify, the pros and cons, and how to compare rates from companies that offer guaranteed life insurance.
Life insurance is the best safety net you can ever buy. Just because you’ve been reject doesn’t mean you can’t get insurance. Don’t let your health or any pre-existing conditions prevent you from getting the insurance your family deserves. This article is going to look at guaranteed life insurance plan and the advantages and disadvantages of these policies.
How Do You Qualify for Guaranteed Life Insurance
One thing that is unique about this form of coverage is that the underwriting process is very limited. When you apply for a traditional life insurance policy, you may fill out several pages of questions about your current and past health history, your current and past lifestyle choices such as travel, hobbies, and even your job. A lot of companies want to know about your driving history too. On top of that you’ll get a complete physical exam. Whew! That’s a lot.
With a guaranteed life insurance policy, companies automatically know that the person who is applying has some health problems and they’ve been turned down before or they just understand that they can’t get approved elsewhere based on their health situation.
So there is no medical exam and there is a very, very short application. With most companies, it is one page. You provide your demographic information and answer a few questions.
It differs depending on the company you apply with, but generally speaking these are the health-related questions that a company will ask
Questions on a Guaranteed Life Insurance Policy:
- Do you currently reside in a hospital or long-term care facility?
- Do you have AIDS or HIV?
- Have you been diagnosed with a terminal illness (meaning you have less than 24 months to live)?
As you can see, there is nothing specific about diabetes or about the majority of long-term complications that a diabetic deals with. The only situation that I can see would hinder a diabetic from getting a guaranteed life insurance policy is if you have end stage renal disease, or kidney failure, and you need a transplant.
After you’ve answer those few simple questions, you can be approved for insurance. These guaranteed life insurance plans are the easiest way to get life insurance coverage. As you can probably guess, as long as you don’t answer “yes” to any of those questions, the insurance company will approve for coverage. Some companies might have an additional questions or two, but this is the general questions you’ll see.
Pros of Guaranteed Life Insurance if You Have Diabetes
- No medical exam and no health questions. Most life insurance policies ask very detailed health questions that will automatically disqualify you or they require a medical exam that will do the same. With guaranteed life insurance, you don’t have to worry about either of those.
- It is a last option for many. If you have some serious health issues then you know how hard it has been to find a life insurance policy. You can’t. With guaranteed life insurance, it provides that one last option to those who really want to get some type of coverage, but haven’t been able to because of their health.
- Fast Coverage. If you purchase a guaranteed issue plan, you can get approved for coverage in less than an hour. Compared to a traditional life insurance policy, this is drastically quicker. With a traditional policy, you could wait a month or more for life insurance.
Cons of a Guaranteed Life Insurance Policy
- It costs more. Because the insurance company is offering a death benefit to a risky health class, they charge more for the policy. This is something that you have to weigh and decide if the higher cost is worth it to you. If you want to get the most affordable life insurance protection, then you’ll need to look at different options for insurance protection. While these plans are going to be more expensive than a traditional policy, you can’t put a price on the peace of mind that life insurance is going to give you.
- The amount of coverage you can get is limited. If you need $500,000 worth of life insurance to cover a mortgage, other debts, or just to provide peace of mind, you won’t get anywhere near that with a guaranteed acceptance policy. Companies know that the person applying for this coverage is a high risk and to offset that risk, they cap the amount of coverage you can get. In most cases, the maximum amount you can obtain is $25,000
- There is a two year waiting period. This is called a graded benefit. The way it works is simple. The full death benefit amount is not available until after two years. If death occurs during the first two years of coverage, the beneficiary will receive the premiums paid into the policy plus interest (between 5% and 7% compounded annually, depending on the company). After the first two years, the full face amount is payable upon the death of the insured.
Is It a Worthwhile Investment?
You may have read that getting a guaranteed life insurance policy is a rip off or something you shouldn’t do. I think that is looking at this type of policy from a narrow viewpoint.
I agree that guaranteed life insurance isn’t right for everyone. If you can get approved for a traditional life insurance policy at a higher rate or even a high risk life insurance policy that offers only a smaller policy amount, then you shouldn’t opt for a guaranteed type policy.
However, if you have some serious health concerns, which many diabetics have, and you have been turned down by one, two, or several companies, then chances are that a guaranteed policy may be your best and only option.
As I stated above, having diabetes, whether you are a type 1 diabetic or type 2 diabetic, doesn’t automatically disqualify you from getting approved for a life insurance for diabetics policy. If your A1Cs are in a reasonable range, then you have several options for coverage.
The challenge comes when uncontrolled blood sugars over the long-term cause complications such as retinal problems, neuropathy, and even organ failure.
These are serious health complications that narrow your options for life insurance coverage.
If you are in this category and you have serious complications, you’ve been turned down for coverage, and you really want to get some kind of life insurance policy in place for peace of mind or to have something set aside for funeral and burial coverage or to pay off outstanding debts that you have, then I don’t see anything wrong with getting a guaranteed life insurance policy.
As I outlined above, just be sure that you understand that the cost is much higher than most life insurance policies. If you’re okay with paying the more expensive premiums, then these plans can be a great way for you to get insurance protection.
I can share a story about a woman in her fifties who I helped get a guaranteed insurance policy. She had a history of serious heart problems, with 3 heart attacks and one being as recent as 2 months before her application. She had been denied for life insurance everywhere else she turned. She was on a fixed income and she had a small budget each month that she wanted to use to get a life insurance policy to make sure that her burial expenses were not left to her children. She was able to get a $10,000 policy for about $142 per month. She was happy with this. It brought her peace of mind and that I think is worth it.
For some, they may not want a policy that small or they may not want to pay that much. It is all up to you whether it is a worthwhile tradeoff or not.
Companies that Offer Guaranteed Policies
Colonial Penn. Available for age 50 to 85 and you can get up to $20,000 worth of coverage, depending on your age and the state you live in. From my research, this company has the highest rates for this type of coverage.
Americo offers a guaranteed issue whole life product that does not require a medical exam, but asks the three questions that I outline above. It s available for ages 50-75 and has a max policy amount of $10,000.
United Home Life offers also offers guaranteed issue life insurance and the age range reaches those in their forties – ages 45-75. Again the maximum amount is $10,000.
The AARP life insurance program through New York Life also offers a guaranteed acceptance policy, but it is only available to AARP members ages 50 to 80 and spouses ages 45 to 80. You can get up to $15,000 worth of coverage. No exam and no health questions to answer.
Working with an Independent Insurance Agent
When you’re shopping around for life insurance, there are dozens and dozens of insurance companies you can choose from. All of them are different, and each of them will give you different rates based on their medical underwriting and rating systems. The rates you get are going to vary wildly.
There are over 800 companies on the market, and all of them will are different. Instead of wasting hours and hours calling agents or researching companies, let one of our independent insurance brokers do the work for you.
We work with dozens and dozens of highly rated companies across the nation. We know which companies have the lowest rates for guaranteed life insurance plan. Working with one of our agents can save you both time and money on your insurance coverage. Not only can we find you the lowest premiums, but we can also find companies that will offer you more coverage for you.
If You Are Unsure, Get a Rate Quote and See How Much it Will Cost
If you aren’t quite sure if a guaranteed life insurance policy is a good choice for you, I would urge you to fill out our simple one page quote form and get connected with an experienced, and knowledgeable independent agent. You’ll be able to compare rates for guaranteed coverage policies, but you’ll also be able to see if you’ve missed any companies or other ways to get approved for a different policy. If you want to speak to a live agent, then simply call us toll free at 1-877-801-4402.
You never know what life’s going to toss at you tomorrow. If something awful were to happen to you, and you didn’t have insurance coverage, your loved ones would be left with a massive amount of debt and other final expenses. Losing someone you love is never easy. Being left with a mountain of debt is going to make the whole situation a thousand times worse.
If you have any questions about guaranteed life insurance for diabetes or the other options available to you, please contact one of our agents today. We would love to answer those question and connect you with the best possible plan. We have years of experience working with all kinds of applicants across the country.