Guaranteed Issue Final Expense Insurance is a type of life insurance designed to cover the costs associated with a person’s funeral and other final expenses. This type of insurance is typically targeted at individuals who may have difficulty obtaining traditional life insurance due to health issues or other factors.
Here are some key features of Guaranteed Issue Final Expense Insurance:
No Medical Exam or Health Questions: One of the main attractions of guaranteed issue policies is that they are typically issued without requiring a medical exam or asking health-related questions. This makes it easier for individuals with pre-existing health conditions to qualify.
Guaranteed Approval: As the name suggests, these policies come with guaranteed approval. As long as the applicant meets the age requirements (usually between 50 and 85), they are generally accepted, regardless of their health condition.
Limited Coverage Amounts: Guaranteed issue final expense policies often provide coverage in smaller amounts compared to traditional life insurance policies. The purpose is to cover funeral expenses, outstanding debts, and other end-of-life costs.
Higher Premiums: Since the insurance company accepts higher-risk individuals without assessing their health, the premiums for guaranteed issue final expense insurance are typically higher compared to traditional life insurance policies.
Cash Value Component: Some guaranteed issue policies may have a cash value component that accumulates over time. This cash value can be borrowed against or used to supplement income in retirement.
Waiting Period: Many guaranteed issue policies come with a waiting period before the full death benefit is payable. If the insured person passes away during this waiting period (often the first two years), the beneficiaries may receive only a return of premiums or a percentage of the death benefit.
It’s important to carefully review the terms and conditions of any insurance policy before purchasing, and individuals considering guaranteed issue final expense insurance should be aware of the trade-offs involved, such as higher premiums and potential waiting periods. Additionally, individuals who are able to qualify for traditional life insurance may want to explore those options as they could offer more favorable terms.