7 Warnings About Guaranteed Issue Life Insurance [Infographic]

Written by Heidi Mertlich

Guarantees usually sound pretty great – they are like a formal promise.

In this particular promise, Guaranteed Issue Life Insurance (GI), you have a pledge that your life insurance will be issued.

Regardless of your circumstances – you can buy life insurance with no medical exam and no health questions.

However, guarantees are only as good as the product that promise is backing. 

So, how good is Guarantee Issue Life Insurance?

Turns out, this particular type of life insurance is recommended in only a few situations.

Goal – Learn everything you need to know about Guaranteed Issue Life Insurance (also called Guaranteed Acceptance Life Insurance), including its pitfalls, before making a purchase.

Table Of Contents

  1. Guaranteed Issue 101
  2. Warnings
  4. Carriers
  5. Seniors
  6. Apply

What Is Guaranteed Issue Life Insurance?

Essentially, Guaranteed Issue is life insurance that everyone qualifies for, regardless of health, and is guaranteed to be issued.

Not to be confused with Simplified Issue or no medical exam life insurance, Guaranteed Issue does not require you to participate in a health interview (although a few questions are sometimes asked), in addition to skipping the medical exam.

Guaranteed Issue Warnings

There are 7 important warnings you need to know about Guaranteed Issue Life Insurance:

guaranteed issue life insurance

Warning #1: Cost

Guaranteed Issue Life Insurance (GI) is often expensive.

Let’s look at some Guaranteed Issue Life Insurance quotes:

Guaranteed Issue Life Insurance Quotes For Male

40 Year Old$26.25$49.58$72.92$96.25$119.58
45 Year Old $29.17$55.42$81.67$107.92$134.17
50 Year Old$22.50$44.09$65.68$87.27$108.85
55 Year Old$29.25$56.50$83.74$110.99$138.24
60 Year Old$32.40$63.17$93.75$124.33$154.92
65 Year Old$37.55$73.09$108.64$144.18$179.73
70 Year Old$47.57$93.14$138.71$184.28$229.85
75 Year Old$63.25$124.49$185.74$246.98$308.23
80 Year Old$88.57$175.15$261.72$348.30$434.87
Monthly premiums. Rates are samples only. Subject to change.

Guaranteed Issue Life Insurance Quotes For Female

40 Year Old$21.67$40.42$59.17$77.92$96.67
45 Year Old$24.58$46.25$67.92$89.58$111.25
50 Year Old$17.69$34.47$51.24$68.02$84.79
55 Year Old$20.93$39.86$58.78$77.71$96.64
60 Year Old$23.57$45.14$66.70$88.27$109.84
65 Year Old$28.26$54.51$80.76$107.02$133.27
70 Year Old$36.21$70.41$104.62$138.83$173.03
75 Year Old$48.91$95.82$142.73$189.63$236.54
80 Year Old$68.65$135.12$201.69$268.25$334.81
Monthly premiums. Rates are samples only. Subject to change.

As you can see, your monthly premiums can be pricey for a small policy. In fact, for the amount of coverage you can secure, Guarantee Issue is one of the most expensive types of life insurance on the market.

Keep in mind – If you can qualify, there are no physical life insurance carriers who provide larger policies for less cost, if you are interested in skipping the medical exam.

Warning #2: Face Amount

Your face amount, also called the death benefit, is limited to modest amounts.

Most Guaranteed Issue policies cap out at $25,000. However, up to $40,000 in coverage is currently available by a limited number of carriers.

To put things into perspective – the average funeral costs over $10,000.

In other words, a GI policy is often used to cover funeral expenses, and perhaps medical bills, but will not provide substantial financial safeguarding.

Warning #3: Graded Benefit

Most Guaranteed Issue life insurance policies are graded, meaning that your beneficiaries are not entitled to the death benefit immediately.

Definition of Graded Death Benefit – a type of life insurance contract in which the beneficiary does not receive the full death benefit until, typically, 2 years after the policy is issued.

What this means – Should you die during the period of time in which your policy is graded (typically the first 2 years), your beneficiary will either be entitled to:

  1. A percentage of your death benefit
  2. The return of your premium payments, plus any accrued interest (this scenario happens more often)

Note: Accidental deaths are excluded from the graded benefit provision. Should you die by accident within the first two years of your policy, your beneficiary will receive the full death benefit. 

Warning #4: Return On Investment

It’s entirely possible to pay more in premiums during the life of your life insurance contract than the death benefit amount.

Grab a calculator and do some quick estimates.

Here’s an example:

  • A 65-year-old male, $15,000 Guaranteed Issue policy
  • Premium payments of: $108.64/monthly (or $1,302.60/annually)
  • If premiums are paid for 12 years, the total is $15,679.20 (more than the death benefit of the policy).

Of course, there’s a big caveat – no one is guaranteed tomorrow, so you may not pay more in premiums than the death benefit is worth.

You’ll need to decide if it’s worth the annual cost for an eventual modest death benefit.

Warning #5: Age Restrictions

You’ll have to fall within a specific age group to qualify for Guaranteed Issue.

Those who fall between the ages of 40 – 85 years can qualify for GI. However, many GI carriers use an age range of 50 – 80 years.

If you don’t fall within those age ranges, there are alternatives. Consider the different types of no physical life insurance. Or, if you are elderly, seniors have different life insurance options.

Warning #6: Knockout Questions

Some Guaranteed Issue carriers do ask a few health questions. Be sure to understand your options with each GI company before apply because not all carriers ask knockout questions.

For example, you may be asked questions about:

  1. HIV/AIDS status
  2. If you (typically within the last 2 years) reside in a nursing home or receive hospice
  3. If you have been diagnosed with a terminal illness

Bottom line – each carrier uses a different application process. Know your choices, with the help of an independent agent, before applying.

Most Guaranteed Issue life insurance carriers we recommend offer life insurance with no health questions.

Warning #7: Other Options

Think of Guaranteed Issue Life Insurance, and we mean this in the nicest way possible, as your last resort.

There are plenty of no exam life insurance options to consider before deciding to purchase GI:

Once you have exhausted all other types of life insurance, then it may be time to evaluate GI.

Guaranteed Issue Life Insurance Carriers

Guaranteed Issue Life Insurance Carriers

Carrier Product Name Issue AgesFace AmountGraded BenefitA.M. Best Rating
AIG Guaranteed Issue Whole Life50 - 85 Years$5,000 - $25,000Yes; 110% of premiums paid for first 2 years A
Gerber Guaranteed Life50 - 80 Years$5,000 - $25,000Yes; 110% of premiums paid for first 2 years A
Great Western Guaranteed Assurance40 - 80 Years $1,000 - $40,000Yes; 110% of premiums paid for first 2 yearsA-
Subject to change.

AIG, Gerber Life Insurance, and Great Western Insurance Company are highly-rated Guarantee Issue companies. At a glance, the top GI carriers look very similar. Let’s look at the fine print for a detailed comparison of the top carriers.

AIG Guaranteed Issue Whole Life (GIWL)guaranteed issue life insurance

With Guaranteed Issue Whole Life Insurance, if you’re age 50-85, you can’t be turned down for health reasons, and you can receive permanent life insurance without having to qualify for coverage based on your health. – AIG

Product At A Glance

  • Face Amounts between $5,000 – $25,000
  • Ages 50 – 85
  • No medical exam, labs, or health questions
  • Client cannot be turned down for health reasons

Fixed Premiums – your premiums (the amount you pay in exchange for life insurance) remain the same for the life of the policy.

Application Process

  • Application typically takes 15 minutes or less
  • Policy is guaranteed to be issued
  • Forms of payment accepted: ACH, social security debit card, credit card
  • Delayed billing for a specific date is available

Riders Included

A rider is an additional benefit to your life insurance contract.

  • Chronic Illness Acceleration Benefit 
    • Returns 100% of premiums paid, up to 50% of the Face Amount
    • No waiting period
    • One-time lump sum payment when insured becomes chronically ill
    • No up-front costs
  • Terminal Illness Benefit
    • 50% of Death Benefit within 24-month life expectancy (or less)
    • No additional costs

Product Specifics

  • Insured must be the Owner
  • Payor can be different than the Insured
  • Social Security Number is required
  • Plan builds cash value
  • Only one policy per Owner/Insured per 12 month period
  • No replacement or conversion into GIWL allowed
  • Annual fee: $24
  • Free look: 30 days

Graded Benefit

  • Years 1 – 2: 100% of premiums paid, plus 10% interest, are returned if death occurs
    • Note – If death is by a qualifying accident, full face amount is paid
  • Years 3+: Full face amount
  • Accidental Death: Full face amount
  • Suicide: Premiums are refunded

Gerber Guaranteed Lifeguaranteed issue life insurance

The Gerber Life Guaranteed Life Insurance Plan provides valuable whole life insurance to help cover final expenses, such as medical bills, burial costs and unpaid debt. – Gerber Life Insurance Company

Product At A Glance:

  • Face Amounts between $5,000 – $25,000
  • Issue Ages: 50 – 80 years
  • No medical underwriting, labs, or health questions

Fixed Premiums – Your premiums will remain the same as long as all premium payments are made.

Application Process:

  • Typically completed online and takes minutes
  • Policy is guaranteed to be issued
  • Forms of payment accepted: ACH (up to 8% discount), credit card, direct express card (Social Security benefits card)
  • Premiums are due on the first day following the period covered by the preceding premium

Provides Cash Value in an emergency – you can borrow against the cash value in your policy, as long as your premiums are paid.

Product Specifics

  • Social Security Number required
  • Available in all states except MT
  • Plan builds some cash value
  • Grace period of 31 days starting on premium due date in which owner may pay overdue premiums
  • Free look: 30 days

Graded Benefit Specifics

  • Years 1 – 2: 100% of premiums returned, plus 10% interest, if death occurs
    • Note – Qualifying accidental deaths receive full face amount
  • Years 3+: Full face amount shall be paid to the beneficiary
  • Suicide: if insured dies by suicide within two years from the Issue Date (one year in ND), premiums will be returned, plus 10% interest, less any debt against the policy.

Great Western Insurance Companyguaranteed issue life insurance

Guaranteed Assurance is a modern day, increased death benefit whole life insurance product that provides you and your family with industry leading final expense coverage. – Great Western Insurance Company

Product At A Glance

  • Face Amounts between $1,000 – $40,000
  • Ages 40 – 80
    • Note – if you are between the ages of 40 -50, and need a GI policy, Great Western is your go-to company
  • No medical exam, labs, or health questions
    • Note Great Western does have an “Assurance Plus” product that includes 3 medical questions

Fixed Premiums – Guaranteed Level for the life of the Insured

Application Process

  1. Typically completed online in minutes
  2. Policy is guaranteed to be issued
  3. Forms of payment accepted: ACH, credit card, direct express card (Social Security benefit card)
  4. Payor may select a specific date of each month to pay the premium
    • If paying with a direct express card, Payor should select a specific Wednesday of each month for premium payment
  5. 30 day grace period for failure to make the premium payment

Builds Cash Value – coverage builds cash value over time and can be borrowed against.

Riders Included

Product Specifics

  • Social Security Number required
  • Plan can be borrowed against
  • Grace period of 30 days (60 days in CA) in which coverage will remain in effect
  • Free look: 30 days

Graded Benefit Specifics

  • Years 1 – 2: 110% of cumulative premiums paid; full face amount for accidental death
  • Years 3+: 100% of the face amount
  • Temporary suicide exclusion exists

Note: All Guaranteed Issue products are subject to change.

Guaranteed Issue Life Insurance For Seniors

Guaranteed Issue life insurance makes sense for seniors, sometimes.

Usually, GI is ideal for seniors who:

  1. Are unable to qualify for other types of life insurance, like Guaranteed Universal Life
  2. Need to secure a modest amount of coverage for end-of-life costs, like funeral and medical expenses

Consider a few examples

  1. John is 65 years old. He is in poor health with a history of heart and lung disease. He would like to ease his family’s financial burden in preparing for his funeral.
    • John purchases a Guaranteed Issue policy for $10,000
    • His monthly premiums are: $73.09
  2. Carol is 75 years old. She needs a policy to pay off some debt she carries. She does not qualify for standard life insurance due to uncontrolled diabetes.
    • Carol purchases a Guaranteed Issue policy for $20,000
    • Her monthly premiums are: $189.63
  3. Richard is 50 years old. He only qualifies for a GI policy due to a history of stroke and cancer. He needs life insurance to cover a few end-of-life expenses.
    • Richard purchases a Guaranteed Issue policy for $5,000
    • His monthly premiums are: $22.50

Bottom line – Guaranteed Issue life insurance can be a gift to seniors who need a modest policy and do not qualify for other forms of life insurance.

How To Apply 

Before you make a purchase, plan on doing two things:

  1. Work with an independent agent – An independent agent will help you explore all of your life insurance options, including whether or not a GI policy is in your best interest. By accessing multiple top-rated carriers, independent agents will find the best policy to fit your needs.
  2. Be ready for your application – Be sure to have your important information ready to communicate: full name, address, date of birth, beneficiary information, and your Social Security Number.

To get started, simply fill out our free quote.

About No Physical Term Life
About No Physical Term Life

We’re an independent life insurance agency that specializes in no exam life insurance. We’re licensed in all 50 states and can help you directly over the phone or even by email if you’d like (just fill out a quote form and you’ll get an email from us).

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