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Guaranteed Acceptance Life Insurance: Best Companies & What to Look Out For

Guaranteed Acceptance Life Insurance: Best Companies & What to Look Out For

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Guaranteed acceptance life insurance, also called guaranteed issue or GI life insurance, is typically a whole life insurance policy with a limited death benefit.

As with other whole life insurance policies, guaranteed issue policies will build a cash value over time, and coverage lasts as long as you continue to pay the premiums. Unlike most life insurance policies, there are no health questions and no medical exam when applying. However, death benefits are typically restricted to less than $25,000. Quotes will also be significantly more expensive since the insurer has no health details and has to assume you're high-risk.

Quotes are entirely based on your age, location and gender. Given the simplicity of the application, you can often get instant coverage — and in many cases, you can purchase a policy online.

Should I buy guaranteed issue life insurance?

While it's convenient, we only recommend guaranteed issue life insurance if you're unable to qualify for other forms of life insurance.

First consider some of the drawbacks. Upfront, a guaranteed life insurance policy comes with a two- to three-year "waiting period." If you die during this period due to a natural cause, such as a disease or heart attack, your beneficiaries won't get the full death benefit. Typically, they will only receive the amount of money you had paid in premiums plus interest (which varies by insurer).

Guaranteed acceptance insurance is also incredibly expensive for the amount of coverage you can purchase, since the insurer is unable to collect or verify any information about your health.

Guaranteed issue insurance should provide a large enough death benefit if you just want to take care of final expenses. Funerals, for example, cost $10,000 on average. But if you want enough coverage to send a child to college or pay off a mortgage, guaranteed acceptance insurance won't provide a large enough death benefit.

We recommend you consider simplified issue life insurance. Simplified issue life insurance doesn't require a medical exam and accepts a wider range of health problems than fully underwritten coverage. But, since you answer a few questions about your health, premiums will be lower than with guaranteed acceptance insurance. In addition, you can find term life insurance and universal life insurance policies that are simplified issue, so you're not restricted to whole life insurance.

But in some cases, guaranteed life insurance could be the way to go because some medical conditions preclude you from qualifying for fully underwritten or simplified issue life insurance. You'll want to consider guaranteed issue life insurance if:

  • You're on dialysis.
  • You have cognitive impairments.
  • You're restricted to a wheelchair.
  • You're in a nursing home.
  • You have HIV, kidney disease or cancer, particularly if you were diagnosed in the past two years.

Comparison of guaranteed acceptance life insurance companies

It can be challenging to find the best guaranteed acceptance life insurance for your needs, so we've assessed the top nine carriers based on quotes and coverage.

Best guaranteed acceptance life insurance companies

AIG is our favorite insurer for guaranteed acceptance life insurance because its prices are competitive, and policyholders may accelerate death benefits if they become ill. However, each of the five companies below has reasonable quotes and a good range of coverage options for their guaranteed issue policies.

AAA
AIG
Gerber Life Insurance
Mutual of Omaha
New York Life
Age availability45-8550-8550-8045-8550-80
Waiting period2 years2 years2 years2 years2 years
Payout during waiting periodPremiums paid + 30% interestPremiums paid + 10% interestPremiums paid + 10% interestPremiums paid + 20% interestPremiums paid + 10% interest
Minimum coverage$5,000$5,000$5,000$2,000$2,500
Maximum coverage$25,000$25,000$25,000$25,000$15,000

Guaranteed acceptance life insurance carriers to avoid

These companies aren't necessarily bad, but we'd recommend starting your search for guaranteed acceptance insurance elsewhere. This is because the companies listed below have higher premiums, longer waiting periods and a smaller range of available death benefits.

Americo
Columbian Financial
Colonial Penn
MassMutual
Age availability50-7525-8050-8550-75
Waiting period3 years3 years2 years2 years
Payout during waiting periodPremiums paid plus 5% interest (year 1); premiums paid plus 10% interest (year 2); 75% of death benefit (year 3)Premiums paid + 6% interestPremiums paid + 7% interest annuallyPremiums paid + 10% interest
Minimum coverage$2,000$2,500 ($5,000 if below 45)Approx. $400, varies by age$2,000
Maximum coverage$10,000$25,000 ($10,000 if below 45)Approx. $17,000, varies by age$25,000

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.