03/10/2023
Are you wondering about life insurance policies with no medical questions or medical exams? Yes, they're real. They’re usually called “guaranteed issue” and many companies offer them, including some that I’m signed on with. Guaranteed issue policies are a good choice if you have a number of significant ongoing health challenges, or if you simply wish to keep your health status – any conditions, medications, etc., private.
But there are some unfortunate aspects to those policies. First, they’re more expensive. Often quite a bit more expensive (not always, but often). Also, the death benefit offered through a guaranteed issue policy is typically capped at an amount that, compared to life insurance policies in general, is more modest: maybe $10,000 or $20,000, at most $25,000. That;s more than enough to cover final expenses but not what you'd want if you're looking to leave a larger benefit amount to your beneficiary(ies).
Another aspect of guaranteed issue policies is that they typically include a period of two or three years during which tiime the full death benefit is not applicable. Instead, during that time, the benefit will be the amount of money that you’ve paid in to the policy in monthly premiums. Some insurance companies will add a certain percentage of interest to that amount, often 10%.
Here's an example: if your monthly premium is $60 and you’ve made 10 payments = $600, the death benefit at that moment would be $600 + 10 %, = $660. That's really good as a tax-free savings account, but not much for a life insurance benefit.
Still, as I said, this is a perfectly good choice if it 1) gets you insured and 2) during the waiting period you consider it a tax-free savings account.
Once the waiting period is complete, the full death benefit is in place.
Please ask me any insurance questions, any time. I might not know the anwer, but, if I don't, I'll find out, and then we'll both learn!
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