How to save big on guaranteed life insurance


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If you’re looking for term life insurance but don’t want to fill out a detailed medical questionnaire, you might be interested in a Guaranteed Issue life insurance policy.

4 Easy Questions

Some people are really interested in guaranteed issue life insurance because all you have to do to get coverage is answer 4 questions (and only 3 of them matter). Are you wondering what those questions are? Here you go:

  1. Do you smoke?
  2. Do you currently reside in a hospital or long-term-care institution?
  3. Have you been declared terminally ill?
  4. Do you have AIDS or HIV?

If you smoke, you can still get a guaranteed issue life insurance policy but it will be more expensive. If you answer “yes” to any of the other 3 questions – sorry, you won’t get a policy.

But if you answer “no” to numbers 2, 3 and 4 a guaranteed acceptance issue company will sell you a policy. Good news.


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Getting a guaranteed issue policy is far easier and faster than the traditional route of buying term life insurance.

This process can be completed in days while a typical term policy could take 6 to 8 weeks to get issued. Those are all good things.

Is there a dark side to guaranteed acceptance insurance?

Yes. There are a number of negatives in fact.

1. Cost

Guaranteed issue life insurance is much more expensive than normal term life. That’s because the insurance company doesn’t know how healthy you are and as a result they take on more risk. In order to compensate for that risk, they charge more.

2. Policy limits

Companies that issue guaranteed acceptance insurance don’t take huge bets. They write small policies. The most guaranteed issue life insurance you can buy is between $10k and $100k.

3. You can’t die soon

If you die shortly after you buy guaranteed issue life insurance your family won’t get the full life insurance death benefit. In fact, depending on the company that issues the policy, you may have to live for another 2 or 3 years in order for your family to collect the “whole enchilada”.

If you die during within those 2 or 3 years, your family will receive either the premiums you paid or a portion of the death benefit. This depends on the company you use.

Talk to an insurance professional

With all these stipulations and limitations, it’s far safer to talk to a professional before even applying for guaranteed issue term life insurance.

Because these policies are smaller and more expensive, they are typically the “life insurance of last resort”. Still, if you have no other options, it could be better than nothing.

If you have a health condition that precludes you from obtaining other less expensive life insurance policies or you need to get covered fast, guaranteed issue might be the way to go. But my experience tells me you have more options than you think.

A better choice might be simplified issue life insurance. With these policies the insurance company asks you a few more questions than they ask when you apply for guaranteed issue insurance.

Additionally, they look at you a bit more closely. The good news is that simplified issue is cheaper term life insurance than guaranteed issue.

That’s good of course, but you might be able to do still better. Here’s what I mean.

Even if you have a health condition, don’t assume that you can’t get inexpensive term life. That can be a very expensive assumption.

It’s not unusual for people in this situation to find that they actually can get a policy that is fully underwritten. That means, they’ll get the coverage they need without being taken to the spending an arm and a leg.

How is that possible? Because every life insurance company looks at your health condition differently. That’s why it’s so important to speak with an objective representative who is familiar with how these companies work.

This article originally appeared on and was syndicated by

Featured Image Credit: AleksandarNakic.