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Guaranteed Acceptance Life Insurance
Thursday, 13 June 2013 11:59

If you watch television, the you've probably seen advertisements for life insurance that guarantees they will accept everyone, regardless of health. Is it worth it?

Let's examine one commonly advertised program that's touted as "Guaranteed Acceptance Life Insurance."

For a woman, age 50, this program advertises $16,664 of coverage for $79.60 per month. There's some fine print, though:  

There are no health questions to answer and no physicals to take to purchase this plan. We can guarantee your acceptance because of a two-year limited benefit period for death from non-accidental causes. If death from non-accidental causes occurs during the first two years of coverage, the beneficiary will receive the premiums paid plus 7% interest compounded annually. After the first two years, the full face amount will be paid for death from any cause.

There's nothing wrong with this policy, but what if you're insurable?

A different company that does not advertise offers traditional Whole Life Insurance that does not have any benefit limitations, and it's montly premium for the same $16,664 of coverage is only $54.74 per month. That's over 27% lower monthly premiums!

If you have some moderate health history, the same policy can be purchased for only $78.88 per month. That's still less premium than the policy advertised on TV, but this policy does not have the two year wait for full coverage. The entire face amount is payable upon death for ANY cause once the policy is issued and the premium is paid. That's a significant improvement in coverage.

If your health is not very good, that same company that doesn't advertise has a "Graded Death Benefit" program that pays the beneficiary premiums plus 10% interest compounded annually for the first two years, with full coverage in all years after that. If the insured dies from an accident during the first two years, the full benefit is paid. The premium for this policy is only $66.52 per month. That's $13.08 per month less than the advertised program, with superior benefits during the first two policy years. This policy is not "guaranteed acceptance" because the company still reserves the right to decline coverage for the following pre-existing conditions: AIDs, Aids Related Complex, Cirrhosis, Heart Attack within 2 years, or HIV Positive.

If you don't have any of those conditions, then it's a good idea to talk to a This e-mail address is being protected from spambots. You need JavaScript enabled to view it about how to qualify for a policy with lower premiums.

If your health is just average, consider this:  For comparison purposes, that same $79.60 per month premium will buy $69,228 of traditional Life Insurance that has the same guaranteed death benefits for life and same guaranteed level premiums for life as the advertised program. The big difference is that the $69,228 policy requires an applicant to answer health questions -- but no insurance exam is required, and there's no blood or urine samples, either.

Another alternative:  30 Year Level Term. That same $79.60 per month premium can purchase $168,893 of coverage, guaranteed to never have a premium increase for 30 years. Again, no life insurance exam, no blood draw, and no urine sample required. All you need to do is contact a This e-mail address is being protected from spambots. You need JavaScript enabled to view it and ask for some help.


Brent D. Gardner, CLU, ChFC