How to Get Life Insurance With No Medical Exam and No Health Questions

Guaranteed issue whole life insurance meets the needs of people with health conditions that would preclude the issuance of a more traditional term or whole life policy. Their main attraction is that they are offered on a no-questions-asked basis – that is, you’re covered for life, or until you stop paying premiums. Thus, even if you have a serious disease like AIDS or cancer, you still can purchase life insurance coverage.

Guaranteed Issue Whole Life Insurance
Guaranteed issue whole life insurance policies are graded benefit, high cost, low face-value whole life policies.They are offered by such companies as Colonial Penn, AAA Life Insurance Company and Globe, as well as Mutual of Omaha. Applicants generally must be in the range of about 45 to 85, depending on the carrier. Premiums remain level for the life of the policy; as long as those premiums are paid on time, the policy remains in force and cannot be cancelled for any reason. In addition, like other whole life policies, they accrue cash value. However, they’re offered with limitations and restrictions.

Graded Benefit
The first limitation of guaranteed issue life insurance is that the insurance isn’t in full force until after two full years of coverage. If you die during the first two years, the death benefit paid to your beneficiaries generally will be the amount you paid in premiums plus interest, although some companies will pay the full face amount for accidental death. After the policy’s been in force for two years, though, the full face amount is paid at the policyholder's death regardless of cause

High Cost
Another disadvantage of guaranteed issue policies is their cost. These policies are generally purchased by people considered a poor risk for insurers, those who cannot qualify for a more traditional policy. Thus, the cost per unit of coverage -- usually $1,000 but sometimes another amount -- is significantly higher than other whole life or term products on the market.

Low Face Amount
Guaranteed issue policies are available only in relatively small face amounts that rarely exceed $25,000. They generally are intended to pay final expenses and perhaps provide a financial cushion as the family adjusts to the loss of income, but won’t be sufficient to meet such expenses as funding higher education or paying off a mortgage.

Other Considerations
While guaranteed issue life insurance is ideal for people whose health disqualifies them from coverage under a more traditional policy, don’t assume this is the case in your situation. Before purchasing a guaranteed-issue policy, get a couple of quotes from traditional carriers. It costs nothing, and if you’re turned down it won’t affect your eligibility for a guaranteed policy.