Guaranteed life insurance is the easiest kind of life insurance to get, but it’s also the most expensive. In order to qualify for this type of policy, the insured will not need to submit to a medical exam or answer any questions pertaining to health. Coverage is guaranteed regardless of physical condition or age, making this type of life insurance often the only option available to those who have a chronic illness or smoke.
Guaranteed life insurance policies are the most expensive type because the insurance company is taking on all of the risk. People who are healthy and young usually choose a different type of life insurance. This drop in their number of clients makes guaranteed life insurance even more costly. Insurance companies often issue a limited number of guaranteed plans, depending on how many standard life insurance policies they have. That way, the standard plans help offset costs associated with the guaranteed policies.
Age is the biggest cost-increasing factor. Because the insurance is guaranteed, older people generally prefer it. People who wouldn’t qualify for a standard insurance plan are guaranteed coverage with this type of insurance. Older people in general are a higher insurance risk due to their advanced age and the increasing risk of death.
Guaranteed life insurance is usually term life insurance. There are few insurers that will offer a whole life insurance policy with guaranteed coverage. Like other term life insurance policies, once the term is over, coverage ceases and no funds are returned.
Besides allowing people who wouldn’t otherwise qualify for life insurance, guaranteed life insurance is fast to receive and easy to apply for. If you have the funds for the premiums, you can get a policy. Guaranteed life insurance plans are targeted towards elderly populations and areas with high levels of poverty because these groups are typically denied traditional life insurance plans.
Like other types of life insurance, guaranteed life insurance is a cash death benefit. Benefits are distributed to beneficiaries at the time of the insured’s death. The money can be used for necessities, such as mortgage or car payments, or any other expenses. There are no limitations to how the money may be used.
Guaranteed life insurance is a good choice for those who have been turned down life insurance in the past. The plans don’t require a medical history or a series of medical-related questions, making it easy to qualify as long as the premium payments can be met.