Guaranteed Issue Life Insurance: Coverage With No Health Questions

What Is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance is a type of whole life insurance that accepts every applicant regardless of health. There is no medical exam, no health questionnaire, and no blood work. If you are within the accepted age range — typically 50 to 85 — you cannot be turned down. That is the guarantee.

This type of policy exists for people who cannot get coverage any other way. If you have been declined for traditional life insurance because of a serious illness, a complex medical history, or advanced age, guaranteed issue provides a path to coverage when every other door is closed. The trade-off is higher premiums and a graded death benefit with a waiting period before the full payout is available.

Guaranteed issue policies are a subset of final expense insurance. Coverage amounts are modest — usually between $5,000 and $25,000 — and the policy is designed to cover funeral costs, outstanding medical bills, and small debts rather than replace years of income.

How Guaranteed Issue Life Insurance Works

The application process for guaranteed issue life insurance is among the simplest in the insurance industry. Here is what to expect:

• No health questions. The application asks for your name, age, address, beneficiary information, and payment details. There are zero questions about your medical history, medications, diagnoses, or lifestyle.
• No medical exam. No doctor visits, no blood draws, no urine samples, and no phone interviews with nurses. The entire application can usually be completed in under 15 minutes.
• Guaranteed acceptance. If you meet the age requirement, you are approved. Period. Cancer, diabetes, heart disease, COPD, kidney disease, prior strokes — none of it matters for eligibility.
• Permanent coverage. As whole life insurance, the policy remains in force for your entire life as long as premiums are paid. There is no term to expire and no renewal required.
• Level premiums. Your premium is locked in at the rate you receive when you purchase the policy. It will never increase regardless of age or changes in health.

The process is fast. Many insurers issue the policy within a few days, and some provide same-day approval. There is no waiting for lab results or underwriting decisions because there is nothing to underwrite.

The Graded Death Benefit: What You Need to Know

The graded death benefit is the most important feature to understand before buying a guaranteed issue policy. Because the insurer accepts everyone without any health screening, it needs a mechanism to prevent people who are very close to death from buying a policy and having it pay out more than they paid in. The graded benefit serves that purpose.

Here is how the graded death benefit typically works during the two-to-three-year waiting period:

• Death in year one from natural causes: The beneficiary receives a return of all premiums paid, plus interest — usually around 10%. The full face value is not paid.
• Death in year two from natural causes: Some policies return premiums plus interest. Others pay a partial death benefit, such as 30% to 50% of the face value. The exact terms depend on the insurer.
• Death in year three from natural causes (if three-year graded): Some policies pay a larger partial benefit, such as 75% of the face value, while others pay 100% starting in year three.
• Death after the waiting period: The beneficiary receives the full face value. From this point forward, the policy functions like any standard whole life policy.
• Accidental death at any time: Most guaranteed issue policies pay the full death benefit from day one if the cause of death is an accident. This exception applies even during the waiting period.

The waiting period is the price you pay for guaranteed acceptance. If you are healthy enough to pass even a simplified health questionnaire, you should pursue that route first to avoid the graded benefit entirely.

Typical Coverage Amounts

Guaranteed issue life insurance offers modest face values compared to traditional life insurance. Most policies range from $5,000 to $25,000, though a few insurers offer up to $50,000. The most common coverage tiers are:

• $5,000 to $10,000: Enough to cover a basic funeral or direct cremation, with a small amount left over for incidental expenses. This is the entry-level tier for people on tight budgets.
• $10,000 to $15,000: Covers a traditional funeral with burial, plus some remaining medical bills. This is the most popular range for guaranteed issue buyers.
• $15,000 to $25,000: Covers funeral costs, medical debts, and provides a cushion for other final expenses like legal fees or outstanding bills. This is the upper range for most guaranteed issue policies.

According to the National Funeral Directors Association, the median cost of a funeral with burial is approximately $7,848 before cemetery costs, flowers, and obituary notices. When those are included, the total commonly exceeds $10,000 to $12,000. A coverage amount of $15,000 or more ensures your family is not left with unexpected expenses.

Who Should Consider Guaranteed Issue Life Insurance

Guaranteed issue life insurance is not the right product for most people. It is specifically designed for a narrow group who cannot obtain coverage through any other means:

• People who have been denied other life insurance. If you applied for simplified issue, term, or whole life insurance and were declined due to health, guaranteed issue is your fallback. It exists precisely for this situation.
• People with serious or multiple health conditions. Active cancer treatment, end-stage renal disease, advanced COPD, recent heart attack or stroke, organ transplant recipients, or people using home oxygen equipment — conditions that disqualify applicants from virtually every other type of life insurance.
• Seniors with no existing life insurance. If you are in your 70s or 80s, a previous term policy has expired, and your health prevents you from qualifying for a new policy, guaranteed issue may be the only option to ensure your funeral costs are covered.
• People who want peace of mind regardless of cost. Some applicants prefer the certainty of guaranteed acceptance over the uncertainty of applying for a policy that might be declined. If you value knowing you have coverage and are comfortable with the higher premiums, guaranteed issue delivers that certainty.

Average Costs by Age

Guaranteed issue life insurance is the most expensive type of life insurance on a per-dollar-of-coverage basis. This is because the insurer takes on everyone, including people who are very sick. Below are approximate monthly premiums for a non-smoking male. Women typically pay 15% to 20% less.

Age 50:

• $10,000 coverage: approximately $35 to $55 per month
• $25,000 coverage: approximately $80 to $130 per month

Age 60:

• $10,000 coverage: approximately $45 to $75 per month
• $25,000 coverage: approximately $100 to $175 per month

Age 65:

• $10,000 coverage: approximately $50 to $80 per month
• $25,000 coverage: approximately $110 to $195 per month

Age 70:

• $10,000 coverage: approximately $80 to $120 per month
• $25,000 coverage: approximately $185 to $290 per month

Age 80:

• $10,000 coverage: approximately $140 to $200 per month
• $25,000 coverage: approximately $330 to $490 per month

These are industry averages. Premiums vary significantly between insurers, which is why comparing quotes from at least three carriers is essential. Smoking status is one factor that some guaranteed issue insurers do ask about, and smokers should expect premiums 25% to 50% higher.

Pros and Cons of Guaranteed Issue Life Insurance

Pros

• Cannot be denied. Acceptance is guaranteed regardless of health conditions, medical history, or medications. No other type of life insurance can make this claim.
• No medical exam or health questions. The application is quick, simple, and requires no doctor visits, lab work, or disclosures about your health.
• Permanent coverage. As whole life insurance, coverage never expires and does not need to be renewed. It stays in force for your entire life.
• Premiums never increase. Your rate is locked in at purchase. Even as you age or your health changes, your monthly payment stays the same.
• Builds cash value. Like all whole life policies, guaranteed issue insurance accumulates a small cash value over time that you can borrow against or surrender.
• Tax-free death benefit. The payout to your beneficiary is income-tax-free under Section 101(a) of the Internal Revenue Code.

Cons

• Graded death benefit. The full face value is not available for the first two to three years. If you die of natural causes during this period, your beneficiary receives only a return of premiums plus interest.
• High premiums. Guaranteed issue costs 30% to 75% more than simplified issue and several times more than fully underwritten policies for the same coverage amount.
• Low coverage limits. Most policies cap at $25,000. This is enough for funeral expenses but not enough to replace income or provide long-term financial support for dependents.
• Poor value for healthy people. If you can qualify for any other type of life insurance, you will get more coverage for less money. Guaranteed issue should only be purchased after being denied elsewhere.
• You may pay more in premiums than the death benefit. Because of the high premiums and small face values, long-lived policyholders may eventually pay more in total premiums than the policy will pay out. For some, this is still worthwhile for the certainty of coverage.

Guaranteed Issue vs. Simplified Issue vs. Fully Underwritten

Understanding the three main underwriting approaches helps you choose the right type of policy. Here is how they compare:

Fully Underwritten Life Insurance

Requires a full medical exam, blood work, urine sample, and detailed health history. The process takes two to six weeks. Applicants in good health receive the lowest premiums and the highest coverage amounts — often $100,000 to several million dollars. Full death benefit is available from day one. This is the best option if you are healthy enough to qualify.

Simplified Issue Life Insurance

No medical exam, but requires a health questionnaire of 8 to 15 yes-or-no questions about serious conditions. Approval is fast — often same-day. Premiums are moderate, and the full death benefit is available from day one with no waiting period. Coverage amounts range from $5,000 to $50,000. This is the best option for people with manageable health conditions who cannot pass a full medical exam.

Guaranteed Issue Life Insurance

No medical exam and no health questions. Everyone within the age range is accepted. Premiums are the highest of the three types, and a graded death benefit means the full payout is not available for two to three years. Coverage amounts are $5,000 to $25,000. This is the option of last resort for people who cannot qualify for simplified issue or fully underwritten policies.

The rule of thumb: Always try to qualify for the most selective type of policy you can. Fully underwritten is the best value, simplified issue is the middle ground, and guaranteed issue is the safety net. Only move to guaranteed issue after being declined for the other options.

Major Carriers Offering Guaranteed Issue Life Insurance

Several well-known insurers offer guaranteed issue whole life policies. When evaluating carriers, look at financial strength ratings from A.M. Best (A- or higher is recommended), the specific terms of the graded benefit, maximum coverage amounts, and age eligibility ranges.

• Gerber Life — Guaranteed Life Insurance. Available to ages 50 to 80 with coverage from $5,000 to $25,000. Two-year graded benefit period. A.M. Best rating: A.
• Mutual of Omaha — Guaranteed Whole Life. Available to ages 45 to 85 with coverage from $2,000 to $25,000. Two-year graded benefit period. A.M. Best rating: A+.
• Globe Life (formerly Torchmark). Available to ages 50 to 85 with coverage up to $25,000. Known for direct-to-consumer marketing. Two-year graded benefit. A.M. Best rating: A.
• Colonial Penn — Guaranteed Acceptance Whole Life. Widely advertised on television. Available to ages 50 to 85. Coverage sold in units that vary by age and gender. Two-year graded benefit. Part of the CNO Financial Group. A.M. Best rating: A-.
• AIG — Guaranteed Issue Whole Life. Available to ages 50 to 80 with coverage from $5,000 to $25,000. Two-year graded benefit. A.M. Best rating: A.
• Kemper Life (Guaranteed Life). Available to ages 50 to 85 with coverage up to $25,000. Three-year graded benefit period — longer than most competitors. A.M. Best rating: A-.

Always verify that an insurer is licensed in your state before applying. You can check licensing through your state's department of insurance website.

Tips for Buying Guaranteed Issue Life Insurance

1. Try simplified issue first. Many people assume they cannot qualify for any life insurance because of a health condition, but simplified issue policies are more lenient than you might expect. Apply for simplified issue before resorting to guaranteed issue — you may save 30% to 75% on premiums and avoid the graded benefit.
2. Compare at least three carriers. Premiums for the same coverage amount can vary by 30% or more between insurers. An independent insurance agent can pull quotes from multiple companies at once.
3. Read the graded benefit terms carefully. Not all graded benefits are the same. Some policies return premiums plus 10% interest, others pay partial benefits in year two. Know exactly what your beneficiary will receive if you die during the waiting period.
4. Confirm accidental death coverage from day one. Most guaranteed issue policies pay the full death benefit immediately if death is caused by an accident, even during the graded period. Verify this provision is included before purchasing.
5. Check the insurer's financial strength. A guaranteed issue policy is only as reliable as the company behind it. Look for carriers rated A- or higher by A.M. Best. This rating indicates the insurer has strong financials and is likely to pay claims decades from now.
6. Use the free-look period. Every state requires a free-look period of 10 to 30 days during which you can cancel for a full refund. Take this time to review the policy details and compare with other options.
7. Name a specific beneficiary. Designate a person — not your estate — as beneficiary. This ensures the death benefit is paid quickly and bypasses the probate process entirely.

The Bottom Line

Guaranteed issue life insurance is not the best deal in life insurance — and it is not supposed to be. It is the safety net for people who have no other options. If a serious illness, complex medical history, or advanced age has closed every other door, guaranteed issue keeps one open.

The trade-offs are real: higher premiums, lower coverage limits, and a graded death benefit that delays the full payout for two to three years. But for someone who has been declined everywhere else, having $10,000 to $25,000 in guaranteed coverage means their family will not be left scrambling to pay for a funeral or settling medical debts out of pocket.

Before buying, always try simplified issue first — you may qualify for better rates and immediate full coverage. If that does not work, compare guaranteed issue quotes from at least three carriers, read the graded benefit terms carefully, and make sure the insurer has strong financial ratings. A well-chosen guaranteed issue policy provides a small but meaningful layer of protection that ensures your final expenses do not become a burden for the people you care about most.