There is one type of life insurance that just about anyone with a pulse can buy. Also known as guaranteed issue life insurance, the age of eligibility varies, but usually ranges from 50 to 80, although some states may allow you to sign up as young as 45 or as old as 85.
If your medical history or health prevents you from purchasing any other type of life insurance, a guaranteed life policy will take you without a health exam, often without even a questionnaire about your medical history.
Guaranteed life policies typically have extremely limited death benefits. They often range from as low as $5,000 to a max of $20,000, although if you shop around you may be able to find a $50,000 guaranteed life policy out there.
Premiums for guaranteed life policies are generally fixed, meaning they won’t go up or down. Usually, they can’t be canceled for any reason than non-payment of premium. Be very careful to read the termination provisions in any policy. Some have grace periods for a missed payment; some don’t.
Some guaranteed life policies do accrue cash value over time (usually after the first couple of years that the policy is in place). Part of your premium pays the cost of the insurance, the remainder builds cash value. This kind of guaranteed life policy will carry a much higher premium.
Most guaranteed life policies have graded benefits. Most only pay 100% after the policy has been in place for two or more years. Depending on your policy, if you die before that, your beneficiary will only receive part of or none of the death benefits. The exception to the graded benefit pay out is accidental death. Most policies will pay 100% in that case, regardless of how long the policy has been in effect. Be sure to read the exclusions and limitations of any insurance policy you purchase.
This is not the policy for you if your doctor has only given you a few months to live. You’d just be throwing your money away. However, it is an option if you’ve been turned down for other types of life insurance. Guaranteed life policies will provide with beneficiary with money for your final expenses (burial or cremation), to pay off any debts left by your estate or to cover medical bills.