Data from the 2022 Insurance Barometer Study shows that 106 million American adults lack life insurance or sufficient coverage. This leaves many American families financially insecure when the primary wage earner dies. 

Guaranteed issue insurance is one way to close the need gap and give more access to life insurance benefits. Keep reading to learn about this type of insurance. We’ll review the pros and cons so you can decide if it’s the right life insurance coverage for you.

What Is Guaranteed Issue Insurance?

Guaranteed issue final expense life insurance is a type of whole life insurance policy that doesn’t require you to answer health questions or undergo a medical exam when applying. Additionally, the insurance provider can’t review your medical or prescription records. 

The best selling point for this type of life insurance is that the insurance company cannot deny you. This makes guaranteed issue insurance convenient for many. It’s particularly suitable for those with health issues.

Other names for this type of life insurance are:

• No questions life insurance
• Guaranteed acceptance life insurance

Pros and Cons of a Guaranteed Issue Policy

There are several benefits of guaranteed issue insurance. Of course, not having to undergo a medical exam or answer any health questions are ideal. This makes guaranteed issue insurance best for people who need life insurance but don’t have other options, such as:

• Those with medical conditions that would make other life insurance impossible or unaffordable
• Those who have a limited budget for life insurance
• Those who only require a small amount of life insurance coverage (up to $25,000)

It’s also easy to apply for and receive guaranteed issue insurance. 

However, there are some cons to be wary of when considering this policy. For one, the guaranteed issue insurance cost is higher than the coverage you receive. You will pay higher premiums for guaranteed life insurance than other life insurance policies.

This is because guaranteed policies are geared towards individuals with poor health. The death benefit is often between $10,000 and $25,000. This is quite low for a life insurance policy. It will only cover final expenses, such as:

• A funeral or burial
• Medical bills
• Small debts

Further, these policies will not pay out the death benefit if you die within the first few years of the policy, usually two or three years, depending on the policy.

The only exception is an accidental death, such as a car collision. If you die within this time, your beneficiary may only receive a refund on the premiums you paid.

Is Guaranteed Issue Insurance Right for You?

Guaranteed issue insurance could be the life insurance you need to offer better financial security to your family when you pass. Consider a guaranteed policy if you are not a candidate or cannot afford another life insurance policy. 

To further explore your burial insurance options, contact us at USA Life. Our independent agency can help you choose the best insurance policy from our portfolio of insurance providers.