Guaranteed issue life insurance is a permanent life insurance policy with no medical underwriting. Simply put, you’re not required to answer questions about your health or complete a life insurance medical exam to qualify for coverage. It’s life insurance you’re guaranteed to get, if you meet the age requirement.
What’s the catch? This type of life insurance typically comes with higher premiums and a lower payout. The payout, or death benefit, is also subject to a waiting period, meaning your beneficiaries won’t receive any money if you die of certain causes within the first few years.
That’s not to say these policies are without merit. If you’re over a certain age and have health problems, a life insurance policy that guarantees coverage can open the door to an otherwise unobtainable safety net.
» MORE: Best no medical exam life insurance policies
Key features of guaranteed life insurance
Guaranteed issue life insurance comes in many different shapes and sizes, with varying age restrictions and death benefits. But there are a few features that apply to almost all guaranteed life insurance policies:
There are no medical exams or health questionnaires. You’ll qualify for coverage regardless of your health.
Premiums stay the same for the length of the policy. Failure to pay your premiums may result in cancellation.
The death benefit won’t decrease over time. However, withdrawals or loans taken out against the cash value may reduce the death benefit.
A waiting period is enforced at the start of the policy, typically for two years. If you die of accidental causes during this time, the insurer pays out the full death benefit. However, if you die of natural causes while the waiting period is in effect, your beneficiaries receive only a percentage of the premiums already paid into the policy.
Policies are a type of whole life insurance. This means they can last your entire life and build cash value. Term life insurance policies, which last for a set number of years before expiring, rarely guarantee acceptance.
Did you know...
You may see guaranteed issue life insurance referred to as “no medical exam life insurance,” but the exam is only one part of the medical underwriting process for life insurance. So if a policy skips the exam but asks you to complete a short health questionnaire, it’s not a true guaranteed issue policy.
» MORE: No medical exam life insurance explained
Who is eligible for guaranteed issue life insurance?
Although your medical history isn’t used to determine eligibility, your age is. In general, guaranteed acceptance life insurance is available to applicants who are 45 to 85 years old. Age restrictions vary among insurers and can be narrower, with some accepting only applicants who are 50 to 80 years old.
Your age can also impact the cost of your insurance premiums. As with all life insurance policies, rates are influenced by risk. The older you get, the riskier you are to insure, resulting in higher premiums.
The good news? Aside from meeting this one qualifying factor, everyone who applies for a guaranteed issue policy is eligible. However, not all insurers offer guaranteed issue products, and even if they do, availability can vary among states.
How much coverage can you get?
Death benefits for guaranteed life insurance policies can be as low as $2,000 and max out at $25,000. For the most part, these policies are used to cover final expenses, such as funeral costs. In fact, covering burial expenses is one of the top reasons why Americans purchase life insurance, according to a 2022 NerdWallet report.
The median cost of a funeral is over $7,848, according to 2021 data from the National Funeral Directors Association. The cost will be different for everyone, so defining your priorities and setting a budget can help you calculate coverage amounts.
🤓Nerdy Tip
When estimating your future expenses, take into account your age, health and the cost of the policy. Depending on your age, if you live for another 20 years, you may end up paying more for a guaranteed issue policy than it pays out.
» MORE: How much life insurance do I need?
How much does guaranteed life insurance cost?
For the price you pay, guaranteed acceptance life insurance policies don’t offer much coverage. For example, a 60-year-old woman can buy a $25,000 guaranteed issue whole life policy for $1,630 a year. But if she’s in excellent health, for roughly the same annual premium ($1,673) she can buy a $500,000 20-year term life policy. While the prices are similar, the term life policy offers 20 times the coverage.
» MORE: Average life insurance rates
Guaranteed issue life insurance annual rates for 50-year-olds
Coverage amount | Average rate (men) | Average rate (women) |
|---|---|---|
$10,000 | $612 | $455 |
$15,000 | $887 | $668 |
$25,000 | $1,474 | $1,104 |
Source for all rates: Quotacy. Lowest three rates for each age and policy type averaged. Valid as of August 17, 2023. | ||
Guaranteed issue life insurance annual rates for 60-year-olds
Coverage amount | Average rate (men) | Average rate (women) |
|---|---|---|
$10,000 | $811 | $643 |
$15,000 | $1,202 | $951 |
$25,000 | $2,066 | $1,646 |
Source for all rates: Quotacy. Lowest three rates for each age and policy type averaged. Valid as of August 17, 2023. | ||
Guaranteed issue life insurance annual rates for 70-year-olds
Coverage amount | Average rate (men) | Average rate (women) |
|---|---|---|
$10,000 | $1,246 | $934 |
$15,000 | $1,854 | $1,387 |
$25,000 | $3,220 | $2,446 |
Source for all rates: Quotacy. Lowest three rates for each age and policy type averaged. Valid as of August 17, 2023. | ||
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Who should consider guaranteed life insurance?
If your age or health prevents you from finding a better priced policy for other types of life insurance, you may want to consider guaranteed life insurance. You can get a small amount of coverage with no questions asked.
But don’t rule out term or whole life insurance just yet. You can often buy life insurance with a pre-existing condition, and it may be cheaper than a guaranteed issue policy. Shop around, compare life insurance quotes and see what coverage you qualify for before committing to a guaranteed issue policy.
🤓Nerdy Tip
If you want to avoid the medical exam but don’t mind answering a few questions about your health, simplified issue life insurance might be a better option. Providing any information about your health — no matter how minor — may help you qualify for a cheaper policy with a larger death benefit than a guaranteed issue policy.
» MORE: A guide to buying life insurance for seniors
Here are some common scenarios where a guaranteed issue life insurance policy may make sense:
You want to leave a small lump sum to your beneficiaries when you die or help them cover final expenses, like burial costs.
Your current health or medical history prevents you from purchasing a standard policy.
You want to purchase life insurance quickly, without waiting for medical exams or questionnaires to be verified, and are willing to pay more for it.
Which health conditions can make you uninsurable with standard policies?
The following health conditions are generally considered “high risk” for standard life insurance policies. While you may be able to get insurance, these conditions can increase the cost and restrict the type and amount of coverage available to you, making a guaranteed issue life insurance policy more appealing.
Autoimmune conditions, such as lupus or rheumatoid arthritis.
Blood disorders, such as sickle cell anemia.
Cancers, such as breast cancer.
Diabetes.
Heart conditions, including transplants.
HIV/AIDS.
Liver and kidney diseases.
Mental health conditions, such as PTSD and schizophrenia.
Neurological conditions, such as multiple sclerosis and epilepsy.
Respiratory conditions, such as emphysema or asthma.
» MORE: Buying life insurance after cancer
What is the waiting period?
Guaranteed issue life insurance typically comes with a "graded death benefit." It’s basically a waiting period, which spans the first one to three years of the policy.
In general, if you die of natural causes within this time frame, the death benefit isn't paid. Instead, your beneficiaries receive a percentage of the premiums you’ve paid into the policy. However, if you die of an accidental cause such as a car crash during the waiting period, the death benefit is paid in full.
After the waiting period ends, the benefit is paid out regardless of the cause of death. Without collecting information on your health, insurers don’t know if an underlying medical condition will result in a claim as soon as you purchase the policy. The waiting period is imposed to help balance this risk.
Did you know...
During the waiting period, claims may take longer to process while the cause of death is determined.
Pros and cons of guaranteed life insurance
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Alternatives to guaranteed issue life insurance
Guaranteed issue life insurance isn’t for everyone. If you don’t have a health condition limiting your options, consider these other types of coverage:
Simplified issue life insurance is a type of permanent life insurance that lets you skip the medical exam by answering a few questions about your health.
Instant life insurance uses “accelerated underwriting” to issue policies on the same day you apply. Insurers rely on big data to pull information about you, such as your age, health status and smoking habits. They then use these details to calculate risk and eligibility.
Group life insurance offered through the workplace typically doesn’t require an exam. While coverage amounts are usually higher than guaranteed issue policies, group life insurance isn’t always portable — meaning you might lose your coverage if you switch jobs.
Accidental death and dismemberment policies generally don’t require an exam or health questionnaire, but they only cover deaths from certain accidents — not deaths by natural causes.
» MORE: NerdWallet’s life insurance reviews
Frequently asked questions
What is guaranteed life insurance?
Guaranteed issue life insurance is a whole life insurance policy with a death benefit of $25,000 or less. You can get it without having to answer any questions about your health, as long as you’re within the eligible age range — typically 45 to 85.
Should I get guaranteed issue life insurance?
Unless you have no other option due to a chronic or terminal illness, you’re probably better off looking at other types of life insurance. That’s because guaranteed life insurance is relatively expensive and offers limited coverage.
What’s an alternative to guaranteed issue life insurance?
The closest alternative to guaranteed issue life insurance is simplified issue life insurance. This type of policy requires you to fill out a health questionnaire, but skips the medical exam.
