Life Insurance Types | Buying Life Insurance | Understanding Life Insurance | Glossary
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Guaranteed Issue Whole Life Insurance

When one purchases Guaranteed Issue Whole Life Insurance, the applicant cannot be turned down for the policy. When applying for Guaranteed Issue Whole Life Insurance, you are not required to take a physical and can qualify for the insurance even if you have a pre-existing condition. However, Guaranteed Issue Whole Life is usually only available for a limited death benefit amount where as Whole Life Insurance policies can be obtained to provide higher death benefit amounts.

Pros and Cons of Guaranteed Whole Life Insurance

There are three main disadvantages to Guaranteed Whole Life Insurance. The first is that premiums are traditionally higher than other types of life insurance. Secondly, Guaranteed Issue Whole Life Insurance normally has a built-in protection for the insurance company because it provides only a partial pay out if the insured dies less than two years from the time the policy is purchased. The one exception to this rule is if the insured should die in an accident. Thirdly, if you are purchasing the whole life insurance primarily as an investment vehicle, you can probably find a more lucrative investment with lower fees. In contrast to the disadvantages, there are many benefits that make Guaranteed Issue Whole Life Insurance particularly attractive to many applicants. One of the most important benefits is, of course, the guarantee of being insured, particularly if you have a condition that makes you likely to be turned away from other types of policies. Additionally, even though your premiums may be initially more expensive, they do not increase as you age. Another benefit of Guaranteed Whole Life is that you build up equity in your policy. You can borrow money against the equity, but will have to pay interest on the loan. You can choose to replace it or your survivors can receive a reduced benefit when you die. Additional equity in your whole life insurance policy is tax deferred. You can also use the equity to pay your premiums in the event you cannot maintain them for a period of time.

When Guaranteed Issue Does Not Make Sense

If you die earlier than two years prior to purchasing the policy, your beneficiaries may only receive a partial death payment or simply have the premiums returned. If you think you may abandon the policy and qualify for term insurance, it may be more beneficial to your loved ones not to purchase whole life insurance because you will spend additional money on premiums when you are not going to keep the policy. Ready to compare? Use the form at the top of this page to view current rates for guaranteed issue whole life and compare those to other whole life insurance products.