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Buying life insurance is easiest when you’re young and healthy, since the best rates and policy terms go to those who pose the least amount of risk to an insurer. But not everyone gets enough life insurance when they’re young, and even some young people have chronic health conditions that make it difficult to get approved. Not only that, but consumers who buy term life insurance and outlive their policies can find themselves in a position where they need more coverage later in life.

If you fit one of these categories and are struggling to buy life insurance due to your age or health, guaranteed life insurance could be your best bet. With guaranteed life insurance, you normally cannot be turned down, which is ideal for people who have existing health issues or simply prefer not to take a medical exam. But there are exceptions, so let’s take a look at the pros and cons of this type of life insurance coverage.

What is guaranteed acceptance life insurance?

Guaranteed acceptance life insurance works exactly how it sounds: You’re guaranteed to be issued a policy regardless of your health and even your age (up to certain limits). There’s a chance you can even lock in a policy with premiums that never go up.

The good news about guaranteed acceptance life insurance is that you don’t have to endure or pass a medical exam. This type of coverage also isn’t just for young people, as you may be able to buy a policy until you’re in your 70’s or 80’s, and coverage is built to last a lifetime.

However, there are also some downsides to guaranteed acceptance life insurance. Since the insurance company is taking on a greater risk by issuing a policy without a medical exam, you may have to settle for less robust coverage with higher premiums than you might otherwise pay. The costs vary depending on what type of policy you choose and whether you buy coverage that builds cash value.

Guaranteed acceptance life insurance for seniors

Some life insurance companies specifically target senior citizens for guaranteed acceptance life insurance, and it’s easy to see why. After all, seniors are older and present a higher level of risk. They’re also more likely to have health conditions that make buying other types of life insurance cost prohibitive.

Senior citizens may find that guaranteed acceptance life insurance is a good choice for them.
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Senior citizens may find that guaranteed acceptance life insurance is a good choice for them.

You’ll usually find that guaranteed acceptance life insurance policies for seniors provide a small death benefit and charge relatively high premiums. As an example, AIG offers guaranteed life insurance coverage with death benefit amounts that range from $5,000 to $25,000 for seniors who are ages 50 to 80. While there’s no medical exam, the policies are expensive — with AIG, a 71-year-old woman could get $25,000 in guaranteed acceptance life insurance for $229.56 per month.

Some companies offer final expense life insurance (also called burial insurance), which is another type of guaranteed issue coverage for seniors. With burial insurance, the death benefit is usually just enough to cover funeral costs and final expenses, yet seniors can get a policy without a medical exam.

Guaranteed whole life insurance

Another type of guaranteed life insurance is guaranteed whole life insurance. Again, coverage is guaranteed with this type of insurance, meaning you can get approved without a medical exam. But as a result, the death benefit for guaranteed whole life insurance tends to be low, and premiums can be on the higher end.

Guaranteed whole life insurance is permanent, so the death benefit lasts your entire lifetime as long as you continue paying the premiums. You may also be able to lock in a specific rate and secure a death benefit that never goes down. Generally, because of the way guaranteed whole life insurance is designed, this type of coverage is geared toward senior citizens who are over the age of 50.

As with all policies, if you plan to buy whole life insurance that comes with guaranteed approval, it can pay to shop around and compare pricing. With AAA, for example, we found that a 71-year-old woman could get $25,000 in guaranteed whole life insurance coverage for $170 per month, while Gerber Life Insurance charges a premium of over $205 per month for a policy with the same death benefit.

Guaranteed universal life insurance

Unlike the other types of guaranteed life insurance we’ve covered so far, guaranteed universal life insurance doesn’t offer guaranteed approval, meaning you’ll likely need to pass a medical exam to qualify for this coverage.

Despite its name, guaranteed universal life insurance doesn't come with guaranteed acceptance, but rather a guaranteed death benefit.
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Despite its name, guaranteed universal life insurance doesn't come with guaranteed acceptance, but rather a guaranteed death benefit.

Rather, the “guarantee” part of guaranteed universal life insurance refers to the death benefit, which is guaranteed for your entire life as long as you continue paying the premiums. However, guaranteed universal life insurance doesn’t have all the bells and whistles of whole life insurance, so it’s often seen as a low-cost alternative. For instance, a guaranteed universal life policy doesn’t build cash value.

Some guaranteed universal life insurance policies let you opt for a death benefit that decreases over time as your expenses decrease and your needs change. Also, with some guaranteed universal policies, you may be able to surrender your policy at certain times and get your premiums back, although this option depends on the insurer.

Is guaranteed life insurance for you?

Like other types of life insurance, guaranteed life insurance comes in many forms. As a result, you’ll want to do some research to find out which type of guaranteed life insurance you’ll benefit from the most. If you can pass a medical exam, you may also want to look at standard term life and whole life insurance policies first, as both options are likely to be cheaper than guaranteed life insurance.

Before buying a policy, you’ll also want to dig deep to calculate how much coverage you truly need. Do you need coverage for burial expenses only? Or, do you want life insurance with a death benefit large enough to provide your family with some extra cash for expenses once you’re gone?

Most types of guaranteed life insurance will approve you regardless of your health, but your death benefit may be low when compared to the premiums you’ll be asked to pay. Either way, it pays to shop around for a guaranteed life insurance policy, as some life insurance companies charge significantly more for the same amount of coverage with similar benefits. But you’ll never know unless you check.

Read CNN Underscored’s guide on all the different types of life insurance.

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