Guaranteed issue or simplified issue life insurance contracts are advisable for only a small percentage of the population. If you have a major medical condition, you may not be approved for any other type of contract. Your health history might keep you from qualifying for a standard life insurance policy.
However, this is not the case for most of us. This is not even true for most senior citizens. Even if you have some health issues, you are likely to qualify for a standard plan.
If you take prescribed drugs for hypertension or bone density issues, you might think that you won't qualify for a standard life insurance contract. For most this is not the case.
You could be charged more than someone who is in perfect health, but you will probably not pay nearly as much as you would if you applied for a guaranteed issue whole life insurance plan.
Guaranteed issue life insurance plans can cost you 2 times as much when compared to other plans. This isn't the only problem. You will probably get a slower equity or cash value build up. Your family will not receive the full death benefit if you pass away in the first two or three years after your effective date.
The future loan value of a final expense insurance contract is not the first thing most people think about when comparing policies. Typically, people will compare the monthly costs and the face amount. Many plans also build cash value and this is an important part of many life insurance plans.
Even if you don't plan to spend the cash it can be used to keep your contract in force during hard times. Many policies will allow you to spend a portion of your equity or cash value to keep the contract going when you are unable to make payments from your checking account.
Your beneficiary may not get what you expect them to get if you purchase a guaranteed issue whole life insurance contract. Many of these policies are modified benefit plans. This typically means that if you pass away within two or three years after your policy's effective date only a fraction of the death benefit will be paid. Your family may only receive the premiums paid plus a little interest.
The only reason to buy a guaranteed issue or simplified issue contract is if you are sure that you will not qualify for an underwritten life insurance contract. Before considering a plan of this type, be sure to apply to other contracts to see what you are able to be approved for.
Avoid being one of the many people who will pay way too much for their life insurance policy. Enduring a medical exam or answering a few medical questions can help you to pay much less. Even if you are turned down, you can get a guaranteed issue or simplified issue contract later so you have nothing to lose by applying for a less expensive contract first.
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