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I think you’ll agree with me when I say it’s really hard to find
affordable guaranteed acceptance life insurance. It turns out the
process of researching and determining the best company is hard for many
consumers, but it doesn’t have to be. We’ll show exactly how to secure
the best guaranteed acceptance life insurance policy in this article
and equip you with the information necessary to make your decision.
My agency has helped over 1,200 consumers purchase guaranteed issue
life insurance. This article is meant to cover everything a person like
yourself should know about buying this type of coverage.
Many consumers purchase Guaranteed Issue Life Insurance to pay their
final expenses without having the hassle of answering any health related
questions – it’s very convenient and it’s a great benefit to buying one
of these policies. We’ve found that often times people are overpaying
and purchasing a slimmed down policy because they didn’t know any
better. That’s because all the advertisements on TV and radio are
misleading advertisements that market this product as “burial insurance”
or “final expense coverage” and they’re extremely overpriced and have a
2 year waiting period.
If you take anything advice from this article before completing the quote form on the side, know this:
You should only purchase guaranteed acceptance life insurance if you have a serious health condition and you can’t qualify for anything else.“Guaranteed Acceptance” and “Guaranteed Issue” mean the exact same thing…the difference is the person who is talking about it.
Consumers usually call it Guaranteed Acceptance and insurance agents usually refer to it as Guaranteed Issue or GI. We’ll use the terms interchangeably in this article. Whatever you call it, it’s the easiest life insurance policy to qualify for because there are no exams, everyone qualifies medically and it’s a short 15 minute process to apply and get coverage in force.
In this article, we’ll cover:
- What Is Guaranteed Acceptance Life Insurance?
- 2 Best Guaranteed Acceptance Life Insurance Companies
- Worst Guaranteed Issue Life Insurance Companies
- Is Guaranteed Acceptance Life Insurance a Good Purchase?
- What’s The Difference Between Whole Life And Term?
- How Underwriting Is Different Than Other Types of Coverage
What Is Guaranteed Acceptance Life Insurance?
Guaranteed acceptance life insurance is simply a small whole life insurance policy that doesn’t have any health questions. The premiums are guaranteed level for the rest of your life and the coverage amount can never go down.Typical amounts are $10,000-$20,000 of coverage, but can go as low as $3,000 of coverage and as high as $25,000 of coverage.
The only requirements are you must be over the age of 50 (typically, some companies go under age 50) and be a US citizen.
These products are built for those who want to take care of the burial and final expenses, but can’t qualify for traditional coverage.
There are 3 main characteristics to a guaranteed issue life insurance policy:
1) Waiting Period of 2 or 3 years before coverage kicks in (depending on the carrier)
2) ZERO health questions & no medical exam
3) Guaranteed level premiums
The main feature folks need to understand is there’s a waiting period before coverage starts known as the “graded death benefit” period. This has a different meaning for every life insurance company – for some companies this waiting period is for 2 years (Good) and others the waiting period is for 3 years (bad).
During that waiting period, the life insurance company will refund your premiums + interest if you pass away. If you pass in an accident, the carrier will pay the full benefit amount.
The important thing to understand is that no matter what, your beneficiaries will receive some payment in the first 2 years.
You should only consider guaranteed issue life insurance if you can’t qualify for any other type of coverage. Always try to secure a policy that has health questions even if you have a serious health condition. There are some carriers out there who will take some specific high risks without a waiting period (what us agents call “first day coverage”). Alway try for first day coverage and if you get declined by the life insurance company, you can always secure a guaranteed acceptance life insurance policy.
2 Best Guaranteed Acceptance Life Insurance Companies
Guaranteed acceptance life insurance should be treated as a commodity. The lowest price should get your business since premiums are guaranteed level for the rest of your life and the coverage amount remains level.So the life insurance companies with the lowest guaranteed issue life insurance rates on the market are:
- AIG Guaranteed Issue Life Insurance
- Gerber Life Insurance (yes, the baby food company)
There are dozens of guaranteed issue life insurance products. AIG and Gerber have the best rates out of all of them. Both of these companies also have e-applications so you don’t even need to handle any paperwork. Simply speak with a licensed agent and they’ll walk you through the process in less than 15 minutes time.
Both AIG and Gerber will take anyone ages 50-80 and up to $25,000 of coverage.
And it’s important to understand that rates are the same for AIG and Gerber no matter what agency you use. We all use the same published rates and no one can mark up the rates or charge any fees (like auto and homeowners insurance can).
You can’t go wrong with either of these companies, just choose the least expensive option as it depends on your age who is less/more expensive. Also, if you need more than $25,000 of coverage, max one carrier out and buy another policy with the other carrier. This is done all the time.
Worst Guaranteed Acceptance Life Insurance Companies
I almost didn’t write this section because it’s never feels right to call out other life insurance companies. I feel compelled to because “guaranteed acceptance life insurance” is advertised all over TV and most consumers who purchase guaranteed acceptance life insurance are on a fixed income and only hear about this type of insurance on TV. For me, I morally feel compelled to write this section.I should note, there’s nothing wrong with these companies beyond the fact that they’re overpriced. Most of them are WAY overpriced.
So who should you stay away from? In no particular order:
Colonial Penn (That TV commercial with Alex Trebek as the spokesperson)
Globe Life
AARP (They market New York Life’s guaranteed issue product)
Americo
Great Western
United Home Life
Columbian
Mass Mutual
Kemper
Vantis
Physicians Mutual
There are some instances where companies like Great Western and Columbian are relevant because they’ll insure folks under the age of 50 that AIG and Gerber won’t insure. Other than those instances, there’s no reason to buy life insurance from any of these life insurance companies.
Is Guaranteed Acceptance Life Insurance A Good Purchase?
Guaranteed Issue insurance is most commonly purchased to pay the costs of a burial, cremation, a funeral service, plot, transportation or any other expense incurred at the end of life– Life’s expenses that are truly inevitable. We will all get to that point one day when a family member will have to pay the expenses for when we die.Guaranteed Acceptance life insurance is the easiest type of life insurance to get because there are absolutely no health questions to answer, no criminal background checks, they won’t come to your house to draw blood or even order any medical records. If you can pay for it, they will give it to you.
But you pay the price for getting a policy with no questions asked. You literally could end up paying a higher price than if you would take a few minutes to answer some health questions.
Whatever you want to call these “no health questions asked policies” makes no difference. The bottom line is that when you purchase life insurance to pay for your funeral costs, it should be there until the day you die, whenever you die. It is our opinion that term insurance should not be used for this purpose.
Only permanent insurance, including Whole Life or Guaranteed No Lapse Universal life should be used for this purpose. I have a very hard time classifying any type of “Term Insurance” as a Final Expense Insurance, Funeral Insurance or a Burial Policy. Why not? Simple…You could out live the term of the policy.
So is guaranteed acceptance life insurance a good purchase? It depends.
Lets say you can’t qualify for anything else and you think you’ll live for a while. The next step you should take is look at your quoted rates and add them up over 5-10 years. At some point (usually after 8-12 years depending on your age) your premiums will catch up to the death benefit. And that’s not all that bad as you’ve really just built yourself a forced saving account that pays out over 2 years. I’m just saying that at some point there’s a breakeven.
What’s the Difference between Whole Life and Term?
You can classify life insurance into two major categories; Permanent Insurance and Term Insurance. Term insurance is typically meant to last a specific number of years or time. Depending on the type of term insurance purchased, the premiums will either stay level for a certain period of time, or they will increase at specific ages along the way and eventually end. For some consumers, that’s just fine because they never planned on keeping it anyway, and only needed it for a certain amount of time.The reason that consumers should buy Term insurance is to have some financial protection for a specific amount of time. For example, new home buyers commonly purchase a 30 year term policy because the mortgage is for 30 years. Others may purchase Term insurance to provide their spouse with income if they die before they reach retirement and start to collect Social Security and their pension. Once they do, they don’t need the coverage any longer.
If you are purchasing a life insurance policy to pay for your final expenses, the need to be buried or cremated will NEVER end. It will always be an expense that someone has to pay for. You know the old saying that “nothing in life is guaranteed but death and taxes?” Well they forgot about the guarantee that someone has to pay for your death. It’s not free! Guaranteed!
From time to time we’ll have a client tell us they don’t care how long it will last, only that it’s the lowest price. Usually after explaining the difference, they understand and are willing to take a lower amount of death benefit in exchange for the coverage lasting a lifetime. But, occasionally we get the consumer who listened to some speaker telling them never to by Whole Life only term, so if they absolutely insist on term insurance, we’ll find them a term policy but make sure they understand what they are getting.
Can you imagine having to look for new life insurance at age 76 after paying your premiums for the last 20 years with nothing to show for it? If paying for your final expenses is really what the coverage is for, you should be looking at whole life insurance which is guaranteed to never change in any way as long as you pay your premiums on time and don’t have any outstanding loans against it.
The premium won’t change, the death benefit stays the same and it lasts until you die or it endows. If a policy endows, then you have lived so long that the policy is worth cash equal to the death benefit, typically at either age 100 or now 121.
Now that you understand the difference between the two different kinds of life insurance that are marketed as final expense, let’s look at the difference between buying Guaranteed Acceptance and Simplified Issue final expense/ burial insurance.
How Underwriting Is Different Than Other Types Of Coverage
Most of the time, Guaranteed Acceptance Life policies will cost more money than Simplified Issue policies, and you will get an inferior product. All you have to do is answer a few health questions and let the agent do what we do best. Even more important than the price, is the death benefit payout. All Guaranteed Acceptance policies have some type of limited benefits during the first 2 years, and a few even limit the death benefit during the third year.The companies that market these plans directly to customers don’t tell you what your other options are, and they make it sound so attractive by pointing out things like:
- No Physicals—Simplified Whole life does not require physicals either
- Locked In Benefit—Simplified Whole Life locks in your benefit too
- Coverage Can’t Be Canceled—Simplified Whole life won’t cancel you if you pay your premiums either
- Flexible Payment Options—All companies let you choose the mode of payment
- Peace of mind—You’ll have more piece of mind knowing your family gets the FULL death benefit from day one!
- Diagnosis of HIV, AIDS or ARC
- Diagnosis of Alzheimer’s or Dementia
- Residing in a Nursing Facility
- Currently hospitalized
- Current use of Oxygen
- Have a terminal Illness
Bottom Line
Make sure you actually need a guaranteed acceptance life insurance policy. We come across a lot of consumers who own a guaranteed issue life insurance policy and can qualify for traditional burial insurance without the waiting period…AND pay much less than they currently are.If you’re a candidate for this product, just remember that guaranteed acceptance life insurance is a commodity. Simply find the least expensive option by using our quoter on this page and request an application if you’d like to apply.
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