What is Guaranteed Issue Life Insurance?

A lot of people on the lookout for guaranteed issue life insurance but is facing challenges in obtaining one will surely love the sound of guaranteed issue life insurance. Guaranteed issue life insurance, as obviously implied, is a type of life insurance policy that is guaranteed to be available to anyone, regardless of the usual conditions that surround application for a life insurance policy.

One of the topmost barriers in buying life insurance is medical history or background. When a person's medical history is not clean, getting life insurance will most definitely be a challenge. The best that can happen is that the person finds a company that provides life insurance with no medical exam, but there are certain restrictions to such transactions, and the price will also be higher. It's a good thing, then, that there is another option, and that is guaranteed issue life insurance. This is a type of life insurance that can be taken out by anyone, whether or not the person has a medical exam. A guaranteed issue life insurance, in fact, does not really base its policies on medical backgrounds, but rather just requires submission of basic information only.

What is guaranteed issue life insurance, aside from the fact that it's the guaranteed policy for anyone seeking for life insurance. To be more specific, a guaranteed issue life insurance policy is a type of whole life insurance. It is different from the ordinary whole life insurance, however, because it releases graded benefits, instead of the ordinary death benefits. Since this is a special kind of life insurance, there are certain changes that have been made to the original concept of life insurance. Thus, one of these changes states that if the policyholder passes away within an amount of time specified, only a particular part of the entire death benefits value will be released to his or her beneficiaries. However, after about two years or more of having the policy, the beneficiaries will already get the full benefits.

Thus, this is only good for people who does not have any terminal or fatal illness. Aside from that, some life insurance companies, under a guaranteed issue life insurance policy, full death benefits are also paid out to beneficiaries in case the policyholder dies of accidental death.

Despite this difference, just like whole life insurance, a guaranteed issue life insurance accumulates in cash value as time goes by. And just like whole life insurance, which is a permanent life insurance, premium payments and policy coverage cannot be changed. Premiums of guaranteed issue life insurance are usually more expensive, but a portion of this is only used to pay off the life insurance itself. The remaining percentage builds up over the years as accumulated earnings. These accumulated earrnings are yours to spend, of course. You can take the money out of the policy to be able to use it in some way. You can also borrow from the cash value of the policy, which will not affect your death benefits as long as you pay the loan accordingly.

Guaranteed issue life insurance is a very helpful option for everyone, but it is not beneficial for everyone. Consider first whether this is what you really need before buying a guaranteed issue life insurance.