If you have health issues and need life insurance, you may be wondering if it is even possible to get coverage. The good news is that there are many options available for people in your situation. In this blog post, we will discuss the different types of life insurance policies available to those with health issues. Also, we will talk about the pros and cons of each one. We will also help you figure out which policy is right for you!
Most People Think Only Healthy People Get Life Insurance
One of the biggest myths about life insurance is that only healthy people can get it. This simply isn’t true! There are many different types of life insurance policies available to those with health issues. The type of policy you qualify for will depend on the severity of your condition and your overall health.
The most common type of life insurance for those with health issues is called “guaranteed issue” life insurance. This type of policy does not require a medical exam. You are guaranteed to be approved for coverage, no matter what your health condition may be.
Guaranteed issue life insurance policies do have some limitations, however. For example, they typically only provide coverage for a limited amount of time (usually two to five years) and the death benefit is usually much smaller than other types of life insurance policies.
Another option for those with health issues is “simplified issue” life insurance. This type of policy does require a medical exam. The underwriting process is much simpler than other types of life insurance. Simplified issue life insurance policies are a good option for those who have health issues that are not considered to be “high risk”.
The Pros and Cons of Life Insurance for Those With Health Issues
Now that we’ve discussed the different types of life insurance available to those with health issues, let’s talk about the pros and cons of each one.
Guaranteed issue life insurance is a good option for those who need coverage but may not be able to qualify for other types of policies. The biggest downside of this type of policy is that the death benefit is usually much smaller than other types of life insurance.
What is Guarantee Issue Life Good For?
Guaranteed issue life insurance can provide life insurance to certain people who need life insurance but don’t have any other options. Perhaps they want to provide money for heirs to pay for a funeral or final expenses. Or perhaps they want to provide a small legacy for children or grandchildren. This type of life insurance can help people who:
- Have medical conditions that would make it impossible or unaffordable to buy other types of life insurance such as whole life insurance
- Have limited budgets for life insurance
- Are OK with having only a small amount of life insurance coverage, such as $25,000
If that’s not you, there are better options. Policies such as universal life insurance can provide higher coverage amounts (much higher, into the millions). These other options may require a life insurance medical exam but can ultimately provide the best pricing. And there are ever-expanding options for no-exam life insurance, especially for term life insurance buyers.
What do You need to Know?
If you’ve decided guaranteed issue life insurance is for you—after ruling out other options—here’s what to know.
Best Age for Buying Guaranteed Issue Insurance
Many guaranteed issue insurance companies have a minimum age between 40 and 50 to apply, and won’t sell new coverage to people after age 80.
Coverage Caps
Guaranteed issue life coverage amounts available are usually very low, often between $10,000 and $25,000. Because of the low amounts of coverage, guaranteed issue life insurance is often purchased to cover only final expenses, such as a funeral, medical bills, and small debts.
High Rates
Guaranteed acceptance of life insurance is one of the most expensive ways to buy life insurance. Unless you have serious health conditions that would get you declined for other policies, look into other policy types first. An independent insurance agent or advisor can help you shop among multiple companies. Also, an experienced advisor will know which insurers are most likely to give you the best pricing based on your medical conditions.
Rates are based on the age at which you bought the policy and your gender. Give us a call to get a quote today!