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Guaranteed-Issue Life Insurance 101: 6 Facts You Should Know

Guaranteed-issue life insurance differs from many other policies because it means coverage is available with no underwriting questions. This can make it a good option for policyholders who need quick and convenient coverage and the added peace of mind that they can apply for regardless of their health or other circumstances. Read on to learn six facts about guaranteed issue life insurance to help you decide whether you should consider this type of policy.

1. You don’t have to take a medical exam

Guaranteed-issue life insurance may not require a medical exam. It may only ask a few basic medical questions on the application to help calculate your premiums. This can accelerate the application process, and some insurers can get you coverage fairly quickly. As a result, guaranteed-issue life insurance may work for you if you don’t like medical exams or have a difficult time getting life insurance.

2. Coverage lasts for life

Guaranteed-issue life insurance never expires as long as you keep up with premiums. No matter when you buy coverage, it lasts for life. This can offer added peace of mind for people who don’t want to worry about losing coverage or having to renew their policy at higher premiums.

3. It comes with cash value

Since guaranteed issue life insurance is a type of permanent life insurance policy, it has a cash value growth component that can help you grow wealth over time. Part of each premium payment goes toward your cash value, which earns a fixed rate of interest tax deferred.

Once the cash value has grown large enough, you may be able to tap into it via withdrawals or policy loans. Withdrawing from your cash value may reduce your death benefit and have tax consequences. Speak with your advisor to see how this applies to you. Borrowing against life insurance gives you access to low rates and no fixed repayment date, but keep in mind that your policy can lapse if the loan balance eclipses your cash value.

4. Coverage amounts are lower

Insurers don’t offer the same level of coverage on guaranteed issue life insurance as they do with traditional policies, such as term and whole life insurance. This means it may provide a smaller death benefit if you pass away. However, a guaranteed issue life policy can still suit you if your beneficiaries don’t need as much coverage. For example, it may be right for you if loved ones will only need the payout to cover end-of-life costs or save for a specific goal.

5. There is a waiting period

Guaranteed-issue life insurance policies have a one to two-year waiting period during which the death benefit is not active. If you pass away during this period, your beneficiaries may get a refund of the premiums you paid, but they won’t receive a death benefit payout. Therefore, it is important to consider the risk of passing away during the waiting period before getting this policy.

6. You can customize it with riders

Guaranteed-issue life insurance may offer various free or paid riders to customize coverage. For example, a waiver of premium rider could help if a disability makes you unable to work by paying your premiums for a period of time. This can help you to maintain coverage despite being unable to earn income. Another example is an inflation rider, which increases your death benefit yearly by a fixed percentage to keep up with inflation.

The bottom line

Guaranteed-issue life insurance can offer coverage that lasts a lifetime. It doesn’t require a medical exam, speeding up the application process. Plus, you can grow cash value and customize your coverage with riders. That said, coverage amounts are lower, and the death benefit won’t be active until after the waiting period. Overall, this policy may benefit policyholders who don’t need a lot of coverage and are looking for an easy and convenient policy.

Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York:

A68000: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. In Virginia, Policies ICC0965JTO & ICC0965JWO. 65000: In VA, Policies ICC0965JTO & ICC0965JWO. B61000: In AR, ID, OK, OR, PA, TX, & VA, Policies: ICC18B61JWO & ICC18B61JTO. In DE, Policies B61JWO, B61JTO. B6000:  In AR, ID, OK, PA, TX, & VA, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q6000 Whole: In AR, DE & OR, Policy Q60100M. In ID Policy Q60100MID. In OK, Policy Q60100MOK. In PA, Policy Q60100MPA. In TX, Policy Q60100MTX. Q6000 Term: In DE, Policies Q60200M. In AR, ID, OK, OR & TX, Policies ICC18Q60200M, ICC18Q60300C, ICC18Q60400C.

Coverage is underwritten by Tier One Insurance Company.

Final Expense: Arkansas, Delaware, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22.Aflac Final Expense policies are not available in New York.

Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.  Coverage may not be available in all states including but not limited to DE, ID, NJ, NH, NM, NY, or VA. Benefits/premium rates may vary based on plan selected. Optional riders are available at an additional cost. The policy has limitations and exclusions that may affect benefits payable. Refer to the policy for complete details, limitations, and exclusions.

Aflac WWHQ | Tier One Insurance Company | 1932 Wynnton Road | Columbus, GA 31999

Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211


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