What Is A Guaranteed Issue Life Insurance Policy?

Guaranteed issue life insurance policy is commonly used among middle-aged people and seniors. Why? What’s the catch? Read along to find out!

Whole life insurance policies provide lifelong protection to policyholders, so your beneficiaries will get a guaranteed death benefit whenever you die. Whole life also has a cash value component that grows over time, and this accumulated cash value can also be used during the policyholder’s life if they choose to borrow or withdraw it.

With premiums paid to keep the policy in force, whole life insurance gives permanent coverage.

Among whole life, there is a type called Guaranteed issue life insurance, which is a lifelong coverage with no medical exam! Seniors usually use this type of policy because they can’t be denied the plan based on their health because of no medical exam.

Sounds fascinating, right?

But there’s another side of the coin too.

Guaranteed issue life insurance policies ALWAYS have a waiting period, sometimes even more than 24 months. If a policyholder dies during that waiting period, there is no death benefit given to the beneficiaries. However, the premiums you had paid throughout the policy are returned- often with 10% interest- to your recipients.

It is not that a person receives nothing when they sign up for the policy and die during the waiting period; their beneficiaries don’t get the desired death benefit. The overall payout is meager than you would expect it to be.

Here is a typical example with sample rates:

Applicant for $20,000 in coverage Guaranteed issue life insurance Whole life insurance
Female, age 70 $156/month $103/month
Female, age 80 $349/month $194/month

Pros and Cons of Guaranteed Issue Life Insurance

There is a list of pros and cons that we have extracted for your benefit so that it is easy for you to determine whether this type of policy works for you.


  • Easy to apply
  • No medical exam
  • No complicated health questions
  • Low premiums because of little coverage
  • If the policyholder dies during the waiting period, premiums are refunded.


  • Low coverage
  • No death benefit if the policyholder dies during the waiting period

Guaranteed Life Insurance for Seniors

Many seniors often find their health deteriorating over time, because of the age factor, they aren’t as strong and healthy as they were in their 40s. Many seniors are denied other life insurance policies because of their health, as it is a risk to invest in them.

This is where guaranteed issue life insurance policy steps in. Having the option of no medical exam or no health questions, this policy is not denied to any senior based on their health.

Here are some of the best-guaranteed acceptance life insurance companies that benefit not only seniors, but also middle-aged people too.

AAA AIG Gerber Life Insurance Mutual of Omaha New York Life
Age Availability 45-85 50-85 50-80 45-85 50-80
Waiting Period 2 years 2 years 2 years 2 years 2 years
Payout During Waiting Period Premiums paid + 30% interest Premiums paid + 10% interest Premiums paid + 10% interest Premiums paid + 20% interest Premiums 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

Note: Sample rates have been extracted online, courtesy of ValuePenguin.

As observed in the data above, Gerber guaranteed life insurance policy best suits seniors because of the age availability and coverage limit. These companies provide excellent benefits and options to people of any age and that too, without a medical exam.

Most people are denied coverage due to a pre-existing condition. If they opt for a guaranteed issue life insurance policy, they can get protection without giving the medical exam.

Simplified Issue Life Insurance

Simplified issue life insurance is a plan where there is a short application process and no medical exam. This type of insurance is excellent for people who want immediate life insurance plans to be approved and don’t want to wait.

Since the process is simplified, many people choose this type of life insurance policy for lifetime protection.


  • Convenience
  • Availability
  • Quick approval
  • No medical exam
  • Excellent for seniors with pre-existing health conditions
  • Privacy
  • Inexpensive coverage


  • Limited offerings
  • Have riders attached to the policy which may sometimes cost more
  • Smaller death benefits
  • Waiting period

Even though this no medical exam policy exists and helps seniors get life insurance, certain health conditions aren’t eligible for this policy, such as:

  • HIV or AIDS
  • Dialysis
  • Heart attack or heart surgery in the last 12 months
  • Stroke in the last 12 months

If you have been diagnosed with either of these conditions, you will have to survive a full waiting period if you want your beneficiaries to receive a total death benefit. Many companies give back a premium refund with 7-10% interest to the beneficiaries to compensate for the death, but they won’t give a full death benefit.


Guaranteed issue life insurance isn’t a policy specifically designed for seniors, but older people tend to get attracted by it since it has no medical exam. The age limit is usually from 40-80 years of age.

You need to contact your insurance company and see what options they have for you; maybe you’re ineligible for guaranteed issue life insurance policy based on some other factor. Keep in touch with an agent to guide you better on your choices and advise which procedure will be better in the long run. Don’t assume and start shopping around for a suitable policy.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.

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