Buying life insurance when you are a senior used to be a hard thing to do, but
now there are many companies that offer Guaranteed Acceptance Life Insurance to
people who would not otherwise be able to buy life insurance due to their age,
health or financial situation. With Guaranteed Acceptance Life Insurance there
is no physical exam requirements or questions about the applicants health. These
plans usually have a limited benefit period. If the death of the policyholder
occurs in the first few years a reduced benefit is paid, or the insurance company
returns the premiums already paid with the accumulated interest. This is how insurance
companies are able to guarantee acceptance.
There are a few disadvantages to guaranteed life insurance. Most of these types
of policies are designed to provide only funeral expenses, so most do not sell
policies with a benefit value of more than $15,000 to $20,000. The cost of guaranteed
life insurance policies are also high, because the company has no other information
but age and gender on which to base the premiums. These two disadvantages can
make guaranteed life insurance very undesirable, especially since you can end
up paying the insurance company more in premiums than the death benefit of the
plan. That means that the insurance policy has a worse performance than a savings
account. The National Association of Insurance Commissioners is actually looking
into this problem to find out if anything should be done.
Guaranteed life insurance policies also have a feature called “Graded benefit
period.” This protects the company from people signing up for insurance while
on their deathbeds. This is done by writing into the policy that if the policyholder
dies within a certain amount of time after the policy is taken out, the company
only has to pay the premiums, plus the interest that that has accrued to the policyholder.
With all of these disadvantages in mind it is usually best to look for traditional
insurance first, and take the physical exam and answer medical questions to find
out if you can get insurance. If you can get traditional insurance you will most
like pay much less for a greater amount of benefit than if you had bought guaranteed
issue life insurance. If you have been turned away from every other policy because
of health or age, guaranteed life insurance is a good option, but it should not
be your first. Talk to a financial advisor and see if a savings or investment
plan would be a better option.
Chris Simons is a prolific freelance writer. You are welcomed to visit http://life-insurance.cyberinformer.com, for more information on Life Insurance.
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