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If you're over 50 and don't qualify for life insurance due to health concerns, look into guaranteed issue life insurance

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  • Guaranteed issue is a type of life insurance that doesn't require a medical exam.
  • It is typically limited to individuals ages 50 and over.
  • It is more expensive than other life insurance policies that don't require a medical exam.
  • If you have health conditions that would typically disqualify you from coverage, then guaranteed issue is an option.
  • Policygenius can help you compare life insurance policies to find the right coverage for you, at the right price »

Most people get life insurance to cover the mortgage, education, and other expenses so their family can continue paying the bills after they die. The goal of having life insurance is to ease the burden on your loved ones after your loss.

Traditional insurance policies require a medical exam as part of the approval process known as underwriting. However, some people will not qualify for traditional life insurance due to health conditions. If you are concerned about not qualifying due to health and are age 50 or over, a guaranteed issue life insurance policy may be your best bet.

What is life insurance?

Life insurance is a contract between you and the life insurance company, where you pay premiums (monthly or annually) for a payout that your living relatives will receive upon your death, known as the death benefit. Should you die, the insurance company pays the death benefit to your chosen beneficiary.

The difference between term and whole life insurance

There are two types of life insurance: whole life and term life. Either can require a medical exam. Whole life premiums can be more expensive than term life premiums because they have a cash value component in addition to the death benefit. You pay a whole life policy throughout your lifetime, so the coverage is for your lifetime.

Term life, on the other hand, is considerably cheaper because it doesn't have a cash value component and coverage (as well as payment) is limited to a given term. Term life insurance covers a 10, 20, or 30-year period. If you die during that period, your beneficiaries get your death benefit. Term life insurance is generally recommended for any adult with a dependent, and its biggest draw is the low monthly payments. 

Guaranteed issue is a no medical exam life insurance policy

Traditional insurance policies require a medical exam as part of the approval process known as underwriting. No medical exam life insurance, including guaranteed issue, offers quick approval for coverage and can be good if you are in poor health. 

Whether you are concerned about a medical exam disqualifying you or simply just don't want to go to a doctor, there are three types of no medical exam life insurance policies: 

  1. Accelerated underwriting: requires a medical questionnaire
  2. Simplified issue: requires a medical questionnaire
  3. Guaranteed issue: no exam, no health questions
Guaranteed issue life insurance
  • Quick approval process, can't be denied
  • No health questions
  • Limited to $25,000 or less and a waiting period for full benefits payout
  • Good if you have poor health 
  • Limited to policyholders 50-85 years old

Guaranteed issue can be whole life or term life insurance and does not require a medical exam or questionnaire which means it falls under no medical exam life insurance. Because there are no medical exams or health questions, life insurance providers consider guaranteed issue applicants a higher risk and premiums are usually more expensive compared to other no medical exam life insurance policies for less coverage.

Guaranteed life insurance is also referred to as "final expense/funeral insurance" because the coverage amounts are so low that they basically only cover funeral and burial expenses. 

Les Masterson, managing editor of Insure, told Business Insider that funeral insurance is different from traditional life insurance in three ways:

  1. It has a lower death benefit, making it less expensive and a good option if you're on a fixed income
  2. It's easier to get this policy — no exam required
  3. It is often purchased by people who are middle-aged or older

Masterson noted that the median price for a funeral is $8,500, and death benefits for funeral insurance can fall anywhere from $5,000 to $25,000. 

According to ColonialPenn, there is usually a two-year waiting period, meaning that if the policyholder dies within the first two years of having coverage, the policy won't pay out.

Guaranteed issue vs simplified issue life insurance

Guaranteed issue life insurance has no medical exam and no medical questions, but coverage is limited to up to $25,000. Simplified issue has no medical exam, but you still have to complete a health questionnaire and provide access to medical records. Simplified issue also offers higher coverage amounts up to $100,000 and cheaper premiums than guaranteed issue policies.

According to Fidelity Life, if you fail to disclose a condition and die on a simplified issue policy, the insurance company can deny paying death benefits to your beneficiaries.

Make sure any funeral insurance kicks in after your death

Funeral and burial insurance refers to insurance that covers final expenses, like funeral or cremation costs. However, this should not be confused with pre-need insurance.

When a person works with a funeral home to decide exactly what they want and they pay for everything in advance, before they die, that coverage is called pre-need insurance, Masterson told Business Insider. 

Pre-need insurance is not recommended because the beneficiary is the funeral home and coverage is specific to the chosen funeral home. If you die before paying the full amount, your family has to pay the difference. Should the funeral home go out of business or you move out of state, you may not have coverage and that defeats the purpose of pre-planning.

According to the AARP, the Funeral Consumers Alliance (FCA) advises against buying pre-need.

How much does guaranteed life insurance cost?

Life insurance providers consider guaranteed life applicants to be a higher risk because there's no medical information. Premiums are usually more expensive compared to other no medical life insurance policies for less coverage.

For guaranteed life insurance, premium calculation depends on your age, gender, where you live, and coverage amount. Understand that there are limits on coverage amounts and it varies by insurance provider.

We found sample quotes for a 51-year-woman for $25,000 in coverage living in Illinois:

Insurance type Coverage amount Monthly insurance premium
AARP Easy Life Insurance (Guaranteed issue) $25,000 $108
Mutual of Omaha Guaranteed Plus Whole Life (Guaranteed Issue) $25,000 $73.50
AARP Level Term (Simplified issue)* $25,000 $18
AARP Level Term (Simplified issue)* $100,000 $52

*Simplified issue policies included for price comparison

In the sample quotes above, we included quotes for AARP's simplified issue coverage for comparison. Although simplified issue life insurance does not require a medical exam, it does require a health questionnaire. If you don't want a medical exam, but can qualify for a simplified issue policy, it is generally a better deal because you can get more coverage for a cheaper premium.

Who should get guaranteed issue insurance?

Guaranteed issue life insurance is for those who might be in poor health and can't qualify for traditional life insurance. It is usually marketed for those over 50 because there is a limit on the coverage amount. It is more expensive than other no medical exam life insurance policies. 

If you qualify for a simplified issue no medical exam life insurance policy, it is generally better to apply for that instead, as you should be able to get more coverage and a cheaper premium.

However, if you can't qualify for other no medical exam life insurance, then guaranteed issue life insurance is your best option.

Shop around online, or even check out those guaranteed issue life mailers that might arrive in your mailbox. Most of these offers are for low coverage amounts, but some coverage is better than none at all. If you have auto, homeowners, or renters insurance, reach out to your agent and ask if they provide no medical exam life insurance — they might be able to accommodate current customers. 

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