Why Is There No Guaranteed Acceptance Term Life Insurance?
The reason no life insurance companies offer guaranteed issue term life insurance is due to the high likelihood of financial loss. In other words, a company offering a term life policy without health questions would essentially lose money 100% of the time.
Here are two key points to keep in mind that explain this reality:
- Because of how it works, term life insurance is always a high-risk proposition for the insurer.
- An insurer that knows nothing about someone’s health while simultaneously insuring their life presents a very high-risk scenario. Someone’s health history is the greatest predictor of their future life expectancy.
The cost of term life insurance is generally very low for a large amount of coverage. This, in itself, poses a high risk because if the insured dies while the policy is in force, the company would incur significant losses.
Here’s an example to illustrate this. A 35-year-old female could get a 10-year term with $100k in coverage for roughly $10 per month or $120 per year.
If she lived the full 10 years, she would have paid $1,200. That means at most the insurer is going to get $1,200- nothing more. If she were to die at any point during those 10 years, the insurer would have to pay out $100,000.
So the insurer is at risk of losing $99k–$100k over 10 years, while at best can receive $1,200.
The only way this scenario makes sense is if the insurer knows with near certainty that the insured will not die during those 10 years.
To ensure that outcome, underwriting must be strict, accepting only a pool of relatively healthy applicants (meaning 99% of them will not die within 10 years). That means there will be a lot of health questions, and most of them (if answered yes) would result in a declined application.
How Does Guaranteed Acceptance Life Insurance Work?
Guaranteed issue life insurance is a type of policy that has no medical underwriting of any kind. That means there is no exam, no health questionnaire, or retrieval of medical records. As the name implies, your approval is guaranteed.
These will always be a type of whole life insurance. Whole life policies have fixed premiums, build cash value, and last forever. Most insurers offering these policies cap the coverage at or around $25,000.
The most important thing to know about guaranteed acceptance policies is the mandatory two-year waiting period (it’s never less than two years). If you die during the waiting period (except for accidental death), the insurer will only refund your premiums plus a small amount of interest.
However, if you live beyond the two-year mark, the insurer will pay the full death benefit for any reason thereafter.
Finally, guaranteed acceptance policies are the most expensive type of life insurance. As stated, they carry a high risk, and with insurance (any kind), a higher risk always translates into a higher cost.
Best Guaranteed Acceptance Life Insurance Companies
There are dozens of providers that offer life insurance policies without health questions. Essentially, the only difference between them all is the cost. Below are three of the best guaranteed acceptance life insurance companies offering the lowest prices.
- $10K Policy Cost$55.00/month*
- New Applicant Ages45-85
- Death Benefit Options$3,000-$25,000
- 2-Year Waiting PeriodYes
- $10K Policy Cost$41.01/month*
- New Applicant Ages45-85 (50-75 in NY)
- Death Benefit Options$2,000-$25,000
- 2-Year Waiting PeriodYes
- $10K Policy Cost$48.00/month*
- New Applicant Ages45-85 (varies by state)
- Death Benefit Options$3,000-$20,000
- 2-Year Waiting PeriodYes
How Much Does Guaranteed Issue Life Insurance Cost?
Most of the time, the cost of life insurance is based on many variables, one of which includes your health history. However, since guaranteed acceptance policies don’t have health questions, your health history does not influence the price. Rather, the cost is based solely on your age, gender, and the coverage you select.
Do You Actually Need A Guaranteed Issue Life Policy?
First, if you simply want a guaranteed acceptance burial policy due to the convenience and immediate approval, by all means go for it. Just be sure you’re fully aware of the drawbacks (the waiting period and higher cost) before you make that decision.
If you’re under the impression that your health prevents you from qualifying for any other type of policy, you’re probably wrong. On the contrary, most people can at least qualify for a final expense life insurance policy that has health questions. Doing so would mean A) the cost is much less and B) there is no two-year waiting period.
Final expense policies have very lenient underwriting, meaning they accept people with all sorts of high-risk medical conditions.
We highly recommend that you speak with an experienced independent insurance agent who represents multiple providers. It’s well worth exploring whether you can qualify for a non-guaranteed acceptance policy. Most people can absolutely qualify for a policy that asks health questions.
Frequently Asked Questions
Any life insurance advertisement that only says “no exam” is going to be a type of simplified issue life insurance policy. There would absolutely still be health questions to answer. Guaranteed issue life insurance policies will specifically say “no health questions,” which is not at all the same as saying “no exam.” Remember, if you only see “no exam”, it means there are still health questions you must answer.
No life insurance company offers guaranteed acceptance universal life insurance. All life insurance policies without health questions are whole life insurance plans.
There are two types of burial insurance: simplified issue and guaranteed issue. So yes, burial insurance policies can be guaranteed acceptance policies, or they can include health questions. It varies by company.
All guaranteed issue life insurance policies have a two-year waiting period. No insurer offers a waiting period that is less than 24 months.
Our Insurance Review Methodology
Every company we review has an overall score that illustrates how well it stands out in the market relative to its competitors. These scores are not subjective. Instead, we utilize a defined 5-star scoring system that applies a weighted average of particular factors, all of which are outlined below and on our review methodology page.
Coverage
Strength
Complaint Index
Hold Time
We measure the price of a company’s most popular policy relative to its competitors’. The closeness of their cost to other companies determines the final score. Read a full breakdown of the price of coverage factor on our review methodology page.
Coverage
Coverage
Strength
Complaint Index
Hold Time
This factor assesses whether a company offers immediate coverage and, if so, how difficult it is to qualify for it. Read a full breakdown of the no waiting period coverage factor on our review methodology page.
Strength
Coverage
Strength
Complaint Index
Hold Time
A company’s financial strength is based on its rating with A.M. Best. Read a full breakdown of the financial strength factor on our review methodology page.
Complaint Index
Coverage
Strength
Complaint Index
Hold Time
The National Association of Insurance Commissioners’ complaint index measures an insurer’s frequency of consumer complaints compared to the rest of the market. The score the insurer receives is based on how it stacks up to the median score of other insurers. Read a full breakdown of the NAIC complaint index factor on our review methodology page.
Hold Time
Coverage
Strength
Complaint Index
Hold Time
The customer support hold time score is based on the average amount of time it takes a company to connect an existing policyholder to a human customer service agent. Read a full breakdown of the customer support hold time factor in our review methodology page.
Why trust Choice Mutual?
When we review products, our findings are unbiased and free of any influence from partnerships or methods of compensation. All findings, good or bad, are solely the derivative of our objective analysis of any given product or company.
As noted on our review methodology page, our researchers evaluate the financial stability of the insurer, policy costs, product limitations, state availability, customer satisfaction, waiting periods (if applicable), and other relevant factors. We aggregate all this cumulative data to develop objective overall scores based on predefined weighted factors.
In addition, a qualified expert who is well-qualified to speak on the matter will provide opinion-based feedback about the company or product being reviewed.
For over a decade, Choice Mutual has been an insurance agency specializing in final expense life insurance. Our expertise in this type of insurance is well documented in numerous authoritative publications, some of which are listed below:
Choice Mutual’s mission is to provide consumers with unbiased, expert commentary and explanations of the topics under discussion. We want our readers to be armed with information and tools not found anywhere else on the internet, so they can make an informed decision.
All content on this website is written by Anthony Martin, a licensed life insurance agent with over a decade of industry expertise, who has been quoted hundreds of times as an expert source by reputable news outlets.
Per our editorial guidelines, we have never used and will never use artificial intelligence to create our content. Every word printed on this website is produced and curated entirely by human beings who have firsthand experience with the subject matter.
- Nationally licensed life insurance agent with over 16 years of experience.
- Personal annual production that puts him in the top .001% out of all life insurance agents in the nation.
Anthony Martin is a nationally licensed insurance expert with over 16 years of experience and has personally served over 10,000 clients with their life insurance needs. He frequently authors entrepreneurial and life insurance content for Forbes, Inc.com, Newsweek, Kiplinger, and Entreprenuer.com. Anthony has been consulted as an expert life insurance source for dozens of high-profile websites such as Forbes, Bankrate, Reuters, Fox Business, CNBC, Investopedia, Insurance.com, Yahoo Finance, and many more.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
Choice Mutual often cites third-party websites to provide context and verification for specific claims made in our work. We only link to authoritative websites that provide accurate information. You can learn more about our editorial standards, which guide our mission of delivering factual and impartial content.
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future life expectancy. https://www.cdc.gov/nchs/nvss/mortality_tables.htm
