Guaranteed
Issue Life Insurance
Author: Ivon T. Hughes
Helping the
"uninsurable" secure coverage is challenging. Clients who have
health problems or have been denied coverage in the past still need life
insurance. One option is guaranteed issue life insurance. Given the high
risk nature of coverage, few insurers offer it. However with a little preparation
and extra effort, you can find the right policy.
Life Insurance
Medical Questions
High risk clients
need to answer questions about their medical history so that you get the
information you need to find the right coverage. Candidates for guaranteed
life policies often:
- have permanent
health problems
- need coverage
to leave a legacy or to provide for final expenses so that their loved ones
are left with no debt.
Guaranteed
Issue Life
Guaranteed
issue policies do not require a physical and preexisting medical conditions
usually are not a factor in the application process. Often such applications
require only general information, such as name, address, ID number, gender
and beneficiary.
The death benefit
generally pays the beneficiary full face value if death occurs after the
waiting period. Policies typically specify a period of one to 3 years during
which time the policyholder will not be covered for the full amount. If death
occurs during this time frame, the beneficiary would likely only receive
a return of all premiums paid with interest. However, if the insured has
a fatal accident, most companies will pay the beneficiary the full amount.
There are pluses
and minuses that come with guaranteed issue policies. Some advantages include:
1. no medical evaluations
2. a level death benefit that is guaranteed as long as premiums are paid
3. premiums will not increase
4. the policy proceeds are usually free of estate tax
5. policies usually avoid probate if a beneficiary is named
On the other
hand, you and your clients may have concerns about the following:
- guaranteed issue policies can be costly
- waiting periods can be lengthy - up to 3 years
- if the client is willing to provide some medical information, he/she may
be able to purchase a different type of coverage that might be cheaper.
If the disadvantages
outweigh the advantages for a particular client, an easy issue policy is
a better choice. Such policies offer the full face value starting from the
date of issue. These policies may work best for those who are under the age
40, need full benefits immediately have been without disease for the last
five to ten years, or have a minor illness.
The "uninsurable"
face many difficult planning decisions, but everyone needs the protection
coverage that life insurance offers. With guaranteed issue policies, approval
may just be simple steps away.
----------------------------------------------------------------------
Ivon T. Hughes, The Hughes Trustco Group Ltd.
Online Insurance Broker - Get a FREE Quote TODAY!
Tel: (514) 842-9001 Email: info@trustco.ca
Web: www.hughestrustco.com
-----------------------------------------------------------------------
