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Guaranteed Life Insurance | Life Insurance Glossary

Some people suffering from serious illnesses find it impossible to qualify for life insurance. There is a product, called guaranteed life insurance that caters to these people. Guaranteed life, also called guaranteed issue, does not require a medical evaluation or even medical information from applicants. That makes it simple to apply and, for many, the only option left for them. However, there are two disadvantages to guaranteed life insurance. First, because the insurance does not rely on medical information from policyholders, premiums can be expensive. Second, the face value, or death benefit, associated with these policies is typically low. That means that it is possible that, when the insurant dies, the beneficiary will receive less money than was paid in premium payments. Many guaranteed life insurance contracts include a �graded benefits� clause, which allow insurance companies to pay back premiums, with interest, instead of paying the full death benefit if the insurant dies in the first few years of the contract.