What Is Guaranteed Acceptance Life Insurance?
‘’A Guaranteed Acceptance Life Insurance is a coverage offered to specific applicants in regards to their health / age status. Its main aim is to cover people with critical illness and it requires no medical exam. ”
However, a guaranteed life insurance has an age restriction; it does not apply to everyone. All insurance companies have a specific age group they cater for. Therefore, if you don’t fall in that category, you will not be allowed to get this type of life insurance.
How Much Does Guaranteed Acceptance Life Insurance Cost?
Generally, most of these policies are available at affordable rates. Expect to pay $20,000 or less on average. For those who are new to this term, ”Guaranteed Life Insurance” is not a lifetime policy plan: it will only cover you for a few years. Let’s say, if you apply for this coverage when you’re 50 years old, the insurer will give a package to cover you for 5 to 10 years, depending on the insurance policy contract you sign up for.
Who Gets A Guaranteed Acceptance Life Insurance?
It is commonly sold to old-aged people and those with very serious health problems. The insurer has some sort of guarantee that you do not have long to live and you are expected to pass soon. Therefore, they will not even require you to undergo a medical exam.
It is a gamble for the insurer, because they can give you a policy of 10 years when in reality your life span could be much shorter, you might die within say, 5 years. However, your insurer will not disclose this to you. Once you have a critical medical condition which, for some reason, cannot be treated, the insurer will know that you are not expected to live long. But the insurer will not hesitate to give you life insurance and this can cover funeral expenses when you finally kick the bucket.
On the other hand, old-aged people between 50 – 85 are eligible to get this type of life insurance. One thing to remember is that when you ask for a Guaranteed Acceptance Life Insurance, you will not fill any forms or take medical exams, which means your premium will be expensive.
I have checked on NEW YORK LIFE INSURANCE COMPANY that a single Guaranteed Acceptance Life Insurance policy will offer you up to a maximum benefit of $15,000 in lifetime protection.
I’m Healthy, Should I Apply For A Guaranteed Acceptance Life Insurance?
Good question and the answer is ”NO” since this type of life insurance is not worth applying for when you’re healthy. However, people who are guaranteed that they will die in the next coming few months might want to make a quick buck by buying up many of these policies from different vendors. As much as this seems logical to do, it’s against the law. Actually, ‘The National Association of Insurance’ has come up with a law to stop such acts. When you apply for this coverage, it comes with ”graded benefits”. This has been introduced to cut down on fraud. “Graded benefits” means that the insurer will only pay a percentage % of the death benefit if the policy has not yet reached its full contract term. So, if the plan covers 10 years and you die within 3 years, less will be paid out to your family members. All this is done to stop adverse selection of insurance plans.
Tips On How To Find The Best Guaranteed Acceptance Life Insurance Plan
- COMPARE DIFFERENT GUARANTEED LIFE INSURANCE COMPANIES
Make a list of life insurance companies you know of. Otherwise, you can Google it and get five most recommended “guaranteed acceptance life insurance providers”. For example, AARP Guaranteed Acceptance Life Insurance, New York Life and Colonial Penn Direct.
On their websites, you will need to fill in a form to apply for this type of policy. It is a simple form that requires you to complete all necessary details and submit the form to get a quote via your email. You have to repeat this process online for all five insurers to get your range of quotes. Once you have obtained all quotes, compare the benefits and the premium, and decide which one will best suit your requirement. You can also use your smart phone to make these comparisons, however, given the small screen of the phone, this process might be time-consuming and frustrating. The other more traditional method is of course to make a phone call to the insurance agents and have a detailed chat to them. You can take advantage of talking to a real person and ask them about everything you want to know. These agents generally have a lot of knowledge about various insurance products and can even tailor a specific plan to suit your needs.
- COMPARE BENEFITS
Now that you have obtained the quotes from each of these insurance companies, it’s time you look at benefits and exclusions from each insurer. These benefits / exclusions are very essential, so don’t ignore them. Since you’re new to the whole process, I suggest you work hand in hand with an insurance agent to help you understand each benefit / exclusion because some of the terms that are used will more than likely confuse you or be open to interpretation.
- OPT FOR WHAT YOU CAN AFFORD
Don’t be misled by your present financial situation, you might be doing well now, but things might change in the near future. The sheer fact that you are applying for a Guaranteed Acceptance Life Insurance Policy, means that your health is not in good condition, is deteriorating or you are simply getting old. Taking both factors into consideration, you may not have enough stamina and energy to work, therefore your ability to make money is probably on the decline. Choose a life insurance which you can afford and maintain in the long term, however, it should also have all the benefits you need.
- VALUATE THE INSURER
As an individual, you need to evaluate the financial background of the insurer you have selected. I know you may not have the skills to dig deep, but you can use basic information to know whether the insurer is problematic when it comes to paying out. Use the internet to assess the rating of that particular insurer. You should work with a company which has solid cash flow and good rating.
- EXAMINE THE CONTRACT
At this stage, you have completed the various application forms and you have in your possession various contracts. Read through each contract carefully because you will be bound to a particular insurer and your own specific contract for an agreed period of time. In America, most states allow a 30-day examination / inspection period, this is enough time for you to decide if the relationship is worth keeping or not. If you don’t feel comfortable with the contract in the first 30 days, you can cancel it back and get a full refund.
What Is The Difference Between Guaranteed & Non-Guaranteed Life Term Insurance?
With the Guaranteed Premium Insurance Policy, the policy has a time limit. It has a duration after which it will come to a conclusion, in most cases it ranges between 5- 10 years. Also the insurer cannot increase the premium until the agreed time period is over. Yet with the Non-Guaranteed Premium, the insurer can increase the premium to a maximum based on what your state laws mandate.
With a Guaranteed plan, the term insurance policy will refer to the benefit amount as a guaranteed sum. This means that this amount will be given to selected beneficiaries once you die. What does this mean? When you pay for a Guaranteed Insurance Plan, the contract you make with the insurer also protects your family and further the insurer has to stick to the agreed death benefit when paying out.
On the other hand, a Non-Guaranteed death benefit has tricky clauses which allows the insurer to adjust the amount of your death benefit on pay-out. They even have the right to change the duration of your term. Therefore, be very careful.
Hope the above information addresses all your questions on Guaranteed Acceptance Life Insurance.