Guaranteed Issue Life Insurance

AAA

DEFINITION of 'Guaranteed Issue Life Insurance '

A type of financial-protection policy that provides cash to a named beneficiary upon the insured’s death, which an insurance company will offer to an applicant regardless of health. Guaranteed issue life insurance tends to be a last resort for individuals who can’t qualify for life insurance because of their current or past health problems and who don’t have the option to purchase life insurance as a benefit through their employer. 

INVESTOPEDIA EXPLAINS 'Guaranteed Issue Life Insurance '

The only requirement to receive a guaranteed issue life insurance policy is that you pay your premiums. However, because there are no qualifications to receive such a policy, those premiums tend to be substantially higher than what a qualified applicant would pay for the same amount of coverage under a term life insurance policy that requires medical underwriting. Shopping around for life insurance can sometimes help find the best value.

In addition to higher premiums, insurance companies that issue guaranteed life policies protect themselves against risk in two additional ways: (1) by offering relatively low payouts, and (2) by typically not providing a death benefit during the first two years after issuing the policy (if the policyholder dies during this time, the company issues a refund of premiums instead). This protects the insurer from having to make payouts for people who sign up for policies when they are close to dying, just in time for their loved ones to receive a death benefit.

RELATED TERMS
  1. Net Premiums Written

    The sum of premiums written by an insurance company over the ...
  2. Business Net Retention

    The amount of policies that remain after accounting for policies ...
  3. Case Management

    Planning, processing and monitoring the healthcare services given ...
  4. Policyholder Surplus

    The assets of a mutual insurance company minus its liabilities. ...
  5. Insurance Coverage Area

    The geographic region in which an insurance policy’s benefits ...
  6. Commercial Insurance Lines

    Commercial insurance lines help keep the economy running smoothly ...
Related Articles
  1. Is Retirement Good For You Or Bad For ...
    Retirement

    Is Retirement Good For You Or Bad For ...

  2. Ebola's Economic Impacts on Liberia, ...
    Economics

    Ebola's Economic Impacts on Liberia, ...

  3. How the Affordable Care Act Changed ...
    Insurance

    How the Affordable Care Act Changed ...

  4. Why You Don’t Need Mortgage Protection ...
    Insurance

    Why You Don’t Need Mortgage Protection ...

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center