Guaranteed Issue Life Insurance: The Option of Last Resort for Permanent Coverage

Guaranteed Issue (GI) Life Insurance is a type of permanent life insurance (often a form of Whole Life) that accepts nearly all applicants regardless of their current health condition. It is designed for individuals who have been denied traditional coverage due to severe or multiple health issues.

The No-Questions-Asked Approach

GI policies are characterized by:

• No Medical Questions: Literally no health questions are asked, and no medical exam is required. Acceptance is guaranteed, provided the applicant falls within the age limits (usually 50–85).
• High Cost: Because the risk pool is high, premiums are significantly more expensive per unit of coverage than underwritten policies.
• Low Face Amounts: Coverage is generally very small, typically limited to $5,000 to $25,000.

The Graded Death Benefit Rule

To offset the high risk, all GI policies include a **Graded Death Benefit** provision. The full death benefit is typically not payable if the insured dies from natural causes within the first two or three years of the policy. Only premiums paid (plus interest) are returned during this grading period.

Disclaimer: This content is for informational purposes only and is not financial or legal advice. GI is an expensive option best suited for covering only final expenses when no other options are available.