Many of us who are older persons or have some other contributory factor that would probably disqualify us for standard insurance polices are beginning to hear about this new entity, a guaranteed life insurance policy. The crux of the matter is that no medical examinations are needed, and persons in certain age groups automatically qualify.

For people in their 50’s, 60’s and 70’s, this may be a viable option, but there are some facts that should be understood. First of all, premiums that will be based solely on age and the face value of the policy without a medical clearance may be quite costly. This doesn’t necessarily make it a bad thing if the person will not qualify for any other type of life insurance. Take into consideration a person who is in his or her mid to late 50’s and has been a smoker for the better part of 3 to 4 decades, standard life insurance policies may be unobtainable or so expensive that they are virtually unobtainable. In this case, a guaranteed life insurance policy may be understandable.

A guaranteed life insurance policy is generally underwritten for less than 20 to 25 thousand dollars. Because of the relatively low face value of the policy, it is usually purchased for such things as funeral costs and other odd bills that beneficiaries may need to cover upon the insured’s passing. While some states have enacted disclosure legislation that makes it mandatory for insurance companies to discuss these higher premiums and perhaps provide viable alternatives, not all states have this requirement. However, many states do have what is referred to as ‘free-look laws.’ These laws entitle the insured the right to change his/her mind within a specified period of days following the date of issuance. A quick online search for free-look laws will yield a list of states and whether or not these laws are in effect.

There are pros and cons of guaranteed life insurance that the consumer must assess prior to purchasing this type of policy. While consumer advocate groups may try to dissuade the general public from purchasing life insurance with higher premiums, the final choice rests with the individual which is as it should be. Informed consumers should be better equipped to know their needs. If other, less costly, life insurance policies are not available then guaranteed life insurance might be just what they are looking for.

Similar Posts:

Share