The graded death benefit
Almost every guaranteed issue policy has a waiting period, usually two or three years. If the insured dies of natural causes during that time, the beneficiary typically receives the premiums paid plus interest instead of the full death benefit. Accidental death is often covered in full from the start. After the waiting period, the full benefit applies.
Cost and limits
Because the insurer accepts every eligible applicant, these policies cost more per dollar of coverage than policies that ask health questions. Coverage amounts are small, and each insurer sets its own age range, commonly somewhere between the mid-40s and mid-80s.
When it makes sense
Guaranteed issue is generally a last option, not a first one. If you can answer health questions and qualify for a simplified issue policy, you will often pay less and may avoid the waiting period. A licensed agent can tell you which type you are likely to qualify for.
Common questions
Can I really not be turned down?
Not for health reasons, provided you meet the insurer's age and state requirements. Availability and age limits differ by insurer and state.
What does the beneficiary get if I die in the first two years?
On most policies, a refund of premiums paid plus a stated rate of interest for non-accidental death. The policy spells out the exact terms.
This page is general information, not insurance, legal or tax advice. Policy terms, eligibility and pricing vary by insurer and state. A licensed insurance agent can explain the specific products they offer.