You’ve read about guaranteed issue life insurance and have a loved one under age 40. You think it might be a good fit for him or her.

Or, maybe you yourself are under age 40 and know that a guaranteed issue life insurance policy would work better for you in your circumstances.

John. I already spoke to a broker. She said guaranteed issue life insurance doesn’t exist for people under age 40.

That isn’t true. It is. How do I know? We have helped many people under the age of 40 with specific health conditions or lifestyle situations obtain guaranteed issue life insurance.

Depending on your situation, sometimes there is no waiting period.

Let’s discuss guaranteed issue life insurance for people under the age of 40.

In this article, we will:

• Give A Brief Overview Of What Guaranteed Life Insurance Is
• 7 Guaranteed Issue Life Options For People Under Age 40
• Guaranteed Issue Life Insurance Under 40 Categorized By Age
• Other Options Instead Of Guaranteed Issue Life Insurance
• Frequently Asked Questions About Guaranteed Issue Life Insurance Under 40
• Final Thoughts About Guaranteed Issue Life Insurance

(Watch an abridged version of this article in 4:07)

We give you a brief overview of the guaranteed issue life insurance next.

What Is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance is just how it sounds. The carrier guarantees policy approval.

We wrote about guaranteed issue life insurance in more detail. Feel free to check the article out.

That means there are no health questions to answer. The carrier does not look up your application history through the MIB or look up your prescription drug history. The carrier doesn’t require a medical exam, either.

You fill out an application, pay the first month’s premium, and then you have life insurance.

It’s that simple. How does that sound?

You may hear guaranteed issue life insurance called other names. Many companies call it guaranteed acceptance life insurance because your application is automatically accepted and approved.

John, this sounds great. 

While that all sounds great, there are some drawbacks to guaranteed issue life insurance. Let’s discuss the advantages, disadvantages, and characteristics of guaranteed issue life insurance, especially for those people under the age of 40.

Characteristics of Guaranteed Issue Life Insurance

The first is that guaranteed issue life insurance is more expensive than a comparable underwritten policy. You’ll generally pay higher premiums for the same death benefit or face value. The reason is that there is no underwriting. As I stated earlier, you don’t answer any medical questions or take a medical exam. The life insurance company doesn’t look up your medical history. The carrier charges more because it does not know the applicant’s health status and mortality risk. It does not know if you are completely healthy or in poor health.

Since the carrier doesn’t know the level of risk, it implements a waiting period on the death benefit. This is a second drawback, but it is justified. Guaranteed issue life insurance companies implement a waiting period to prevent quick death benefit payouts on death due to natural causes.  Depending on the carrier, the waiting period is usually 2 or 3 years. Some carriers call this waiting period a “graded period.” We will discuss this in more detail later in the article.

Waiting Period Limitation

Suppose you die within the waiting period by sickness or other natural cause (i.e., a natural death). In that case, the carrier pays your beneficiary the premiums you paid during that time frame plus interest.

After the waiting period, the carrier pays the death benefit 100% in full, no matter how you pass away.

If your death is from an accident, the carrier pays the full death benefit amount anytime, even during the waiting period.

Many people don’t like the waiting period. However, think about it for a minute. Remember that these companies do not underwrite. If carriers did not implement a waiting period, they would have to pay death benefits immediately. In order to stay in business, they would have to increase premiums to astronomical rates. (However, many would close and go out of business.) That isn’t fair to anyone.

3rd Limitation

A 3rd limitation is the death benefit. Usually, carriers limit the death benefit to like $25,000 or $50,000. These low coverage amounts make guaranteed issue life valuable insurance for final expenses, funeral costs, medical bills, and other end-of-life costs. However, if you need more, like $100,000 of life insurance, then you will have to purchase between 2 and 4 guaranteed issue life insurance policies.

Moreover, most guaranteed issue life insurance policies are whole life policies. However, we are one of the few brokers that offer guaranteed issue term life insurance.

Who Can Use Guaranteed Issue Life Insurance?

People with moderate to severe medical conditions or who have a unique lifestyle situation (let’s say a recent DUI) can use guaranteed issue life insurance. For example, guaranteed issue life insurance is useful for people who have:

(1) AIDS/HIV

(2) Muscular dystrophy

(3) cancer

(4) illegal drug use

(5) alcohol abuse

(6) Huntington’s disease

(7) cerebral palsy

(8) a disability that prevents full-time employment

(9) Kidney disease

(10) Cirrhosis / severe liver disease

(11) Alzheimer’s / dementia

(12) ALS

(13) severe heart ailments

(14) severe respiratory ailments

(15) Down syndrome

(16) Autism

(17) severe nervous disorders

(18) mental incapacity

(19) people taking suboxone

(20) current probation or parole from prison

The list goes on and on…

Again, guaranteed issue policies are useful for people with severe medical issues, health issues, or lifestyle situations. These types of policies can be a good “bridge” until you qualify for something better. While many carriers offer guaranteed issue life insurance plans for people 50 and over, only a few offer it for young adults aged 40 and under. We are one of the few brokers that have guaranteed issue life insurance options for people under age 40. We discuss those next.

Guaranteed Issue Life Insurance For People Under Age 40

Not many life insurance companies offer life insurance for younger people with severe medical conditions or lifestyle situations.

However, as I mentioned, we have options.

Here are the current guaranteed issue life insurance options for people under 40. We will update you as plans change.

(1) A stand-alone whole life insurance policy available for children ages 0 to 17. $15,000 death benefit only. A parent must apply for life insurance with the same company and be approved. Not available in all states.

(2) A small term life insurance policy rider. The parent can apply for a child from ages 0 to 25 at guaranteed issue, not convertible. Up to $10,000 death benefit. No waiting period.

(3) Term life insurance policy on the parent. The parent can apply for a guaranteed issue child rider for up to $10,000 (convertible) from ages 0 to 17. No waiting period.

(4) A stand-alone whole life insurance policy, available for ages 0 to 85, up to $30,000. Two-year waiting period. Carrier accepts POA or guardianship form.

(5) $10,000 (depending on age) of whole life insurance. Ages 0 to 76. POA or guardianship form allowed for insureds over age 18, provided the form contains the proper legal verbiage (contact us). There is no waiting period currently.

(6) Guaranteed issue whole life, up to $75,000, between ages 18 and 75. Must be gainfully employed. Available in all states except New York.

(7) A $50,000 guaranteed issue term policy for those who are gainfully employed only. Term to age 80, but the death benefit cuts 50% at age 65.

These guaranteed issue life insurance options are not available in every state. They are also subject to change at any time. Please contact us or use the form at the end of this article if you have questions.

Guaranteed Issue Life Insurance Under Age 40 Application Process

Life insurance application processes are so much easier than they were back in the early to mid- 2000s.

If you are a parent applying for a guaranteed issue policy on a child, we usually need you on the phone for about 30 minutes to complete the application. It is then emailed to you, and you electronically sign it.

If you are applying for yourself, it is generally the same process. Some carriers have a self-enrollment link.

In all cases, we pre-qualify you (or your child) to make sure you are eligible for guaranteed issue life insurance. By prequalifying you, we can determine if better life insurance options exist. In many cases, we can get you better coverage than a guaranteed issue life insurance policy (more on that later in the article).

Guaranteed Issue Life Insurance Under Age 40 Categorized By Age

For your convenience, the options are categorized by age below. If you have any questions, just let us know.

Guaranteed Issue Life Insurance For Ages 0 To 17

• A parent applies and is approved for life insurance with one carrier we work with. Once approved, and after 30 days of holding the policy, the parent can then apply for $15,000 of whole life insurance on the child from age 0 to 17 at guaranteed issue. No waiting period exists.
• A small term life policy, can apply for a child from ages 0 to 25 at guaranteed issue, not convertible. No waiting period. Currently, you can purchase $10,000.
• Up to $10,000 (depending on age) of whole life insurance. No waiting period currently.
• Up to $30,000 whole life insurance, guaranteed issue, stand-alone policy. Two-year waiting period.

Remember, if you are a parent applying for your child, you don’t need a POA or guardianship form.

Guaranteed Issue Life Insurance For Ages 18 To 39

• Up to $10,000 (depending on age) of whole life insurance is available for insureds ages 0 to 39. A POA or guardianship form is allowed for insureds over age 18 provided the form contains the legal verbiage (contact us). There is no waiting period currently.
• Guaranteed term life insurance, up to $50,000 of term to age 80. Applicant needs to be gainfully employed.
• Up to $30,000 whole life insurance, two-year waiting period. If applying for another person, you need to have a proper POA or guardianship form.
• Up to $75,000 whole life insurance, guaranteed issue. No waiting period; however, you need to be gainfully employed.

So, you can see there are still many guaranteed issue life insurance options for those under the age of 40.

Other Options Instead Of The Guaranteed Issue Life Insurance

We would be remiss if we did not discuss other life insurance options.

More often than not, even people with moderate health conditions or lifestyle situations can find better life insurance options than guaranteed issue life insurance.

Maybe they tried one carrier or worked with only one agent, and the agent told them a guaranteed issue plan was the only option.

We work with so many carriers. A better life insurance policy may exist.

For example, we have helped many individuals with multiple sclerosis, heart disease, other heart problems, rheumatoid arthritis, and bipolar disorder, among many different conditions, obtain affordable life insurance with no waiting period.

We also have helped those on parole or probation obtain life insurance, up to $150,000 in death benefit with one carrier we work with. Depending on the person’s situation, we can typically get people on current parole or probation up to $250,000 or more.

The type of life insurance available to you really depends on your situation as well as the severity of any health conditions.

So, before you think you need a guaranteed issue life insurance policy, it is best to assess your situation and work with an independent agency like My Family Life Insurance. Independent agencies like us work with many life insurance carriers, We can tell you if a guaranteed life insurance policy is indeed needed in your situation. Contact us. We can help.

Frequently Asked Questions About Guaranteed Life Insurance Under the Age of 40

Let’s discuss some frequently asked questions about guaranteed issue life insurance for people under the age of 40.

What Is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance is a type of life insurance coverage with no underwriting. That means you are automatically approved for life insurance coverage. You just fill out the application, and the carrier approves your application. There are no health or lifestyle questions to answer. Moreover, companies don’t look up your health history or require a paramedical exam.

Guaranteed issue life insurance is sometimes known as guaranteed acceptance life insurance because the carrier automatically accepts your application. You may hear companies call their guaranteed issue life insurance policy a guaranteed acceptance policy. They are the same.

Why Is Guaranteed Issue Life Insurance Hard to Find for People Under Age 40?

There are many reasons. The main reason is risk. People under the age of 40 who need guaranteed issue life insurance likely have a high risk (in the company’s view, the risk is the probability of an early or unexpected death). Many companies don’t want to accept this kind of risk. However, as we illustrated in this article, we work with many companies that offer guaranteed issue life insurance for people under the age of 40.

What Type Of Policy Works Best for Guaranteed Issue Life Insurance?

Guaranteed issue life insurance comes in two types (usually): whole life and term life.

Whole life insurance policies are the most common type of guaranteed issue life insurance. It contains cash value. Cash value is like a savings account contained within the policy. Without getting in the weeds, the cash value is essential to keeping the monthly premiums level and fixed.

Whole life insurance also lasts the insured’s entire lifetime. It pays the death benefit when the insured passes away. Many people purchase guaranteed issue whole life insurance to pay for their funeral expenses or final expenses. You may hear guaranteed issue life insurance called final expense insurance or burial insurance, as that is the intention of the life insurance.

Term life insurance exists for a specific time period, like 20 years. If you pass away during the term, the carrier pays the death benefit to your beneficiary. Your beneficiaries receive nothing if you are still living after the term period. Term life insurance is good for people needing coverage for a short duration, to cover a mortgage or other need, or to cover an unexpected death.

You will generally pay a lower premium rate for term life compared to whole life.

The best option is the one that fits your needs and situation. However, the most common option is whole life insurance.

I Heard That Some Policies Have a “Graded Death Benefit.” What is That?

A graded death benefit is simply a type of life insurance policy that pays a percentage of the death benefit out if death occurs in the first 2 years of the policy.

Contrast this with a guaranteed issue life insurance policy that returns the premiums paid if death occurs during the first 2 years of the policy (i.e., waiting period).

Because the beneficiary may receive a percentage of the death benefit, companies typically require underwriting.

However, as I mentioned earlier, a guaranteed issue policy sometimes costs less than a comparable graded benefit policy. Moreover, in most cases, we can provide you with an immediate benefit policy (i.e., no waiting period). Contact us to learn more.

How We Can Help You Obtain Guaranteed Issue Life Insurance For People Under Age 40

Yes, guaranteed issue life insurance is available for people under the age of 40. We described 7 guaranteed issue life insurance options available to those under 40. The options depend on your age and state where you live.

Do you feel you or have a loved one under the age of 40 who could benefit from a guaranteed issue life insurance policy?

Contact us or use the form below. We can help make that determination. As I mentioned, we can sometimes get you a policy with an immediate benefit.

Unlike other agencies, we are not beholden to one or two life insurance carriers. Only to you! I know that sounds strange. Contact us or use the form below. You won’t regret it.

If the guaranteed life insurance isn’t for your situation, at least you learned something new, and we will part as friends. Seriously! You see, we always act in your best interest. That means if something else works better in your situation that we can’t offer, we still recommend that. You can always reach back out to us if your needs change.