Guaranteed Acceptance Life Insurance | What Is It and Do You Need It?

Aissa Martell
Written by
Aissa Martell
Icon of a woman
Written by
Aissa Martell
Insurance Writer
Aissa Martell is a licensed insurance producer in the State of New York. She is a creative writer and has been freelance writing for five years. She’s happy to share her knowledge of the insurance industry and its products.
John Leach
Edited by
John Leach
Photo of an Insurify author
Edited by
John Leach
Insurance Content Editor at Insurify
John Leach is an insurance content editor who has worked in print and online. He has years of experience in car and home insurance and strives to make these topics easy to understand for everyone. He has a linguistics degree from UC Santa Barbara.

Updated April 14, 2021

Reading time: 7 minutes

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Why you can trust Insurify

Insurify is America's highest-rated insurance comparison platform. We partner with the nation's top insurance companies and are licensed as an agent in all 50 states. However, the insurance experts writing our content operate independently of our partners, and you can learn more about how we make money by viewing our advertising disclosures. Also check out reviews from over 3,000 satisfied customers, our data methodology, and our editorial standards.

Life insurance, like all insurance, is a form of risk management. Risk is defined as “the chance of loss.”

So what do you do if you develop a terminal illness and you haven’t fully prepared for this possibility? A guaranteed acceptance life insurance policy provides life insurance coverage for people with health conditions who need life insurance.

Unlike most life insurance policies, guaranteed acceptance whole life insurance does not require medical underwriting, and approval is guaranteed.

With Insurify, you’ll be able to compare quotes from leading life insurance companies that understand the need for guaranteed life insurance in the insurance market.

What is guaranteed acceptance life insurance?

A guaranteed acceptance life insurance policy, also known as a guaranteed issue life insurance policy, forgoes medical underwriting and a health questionnaire to deliver a sum of money to beneficiaries. It’s classified as final expense life insurance, a type of permanent or whole life insurance policy whose primary goal is to furnish funds for end-of-life expenses, such as funeral costs.

There is a waiting period of usually two to three years, during which the policyholder must pay premiums on the insurance policy before the full death benefit can be paid out. Most life insurance companies have a standard protocol that applicants should be between the ages of 40 and 85 to apply, and almost no one is turned down.

Underwriting is the process in life insurance of determining premiums and also authorization of the policy. Underwriters use various sources for their determination, such as an attending physician’s report, the Medical Information Bureau (MIB), and a medical exam. They also take your age into consideration, and with traditional life insurance policies, the older you are, the higher the premium if you qualify. Older people or individuals with illnesses or health issues may not qualify for a traditional life insurance policy.

In addition, traditional whole life insurance policies have policy exclusions. Some examples of exclusions are dangerous occupations and hobbies, illegal activity, and alcohol and drug use. If you participate or have participated in hazardous or illegal activity or have a history of substance abuse, your chances of qualifying for a traditional life insurance policy are minimal. With a guaranteed acceptance life insurance policy, peace of mind regarding final expenses is more certain.

In an effort to encompass the community of people with health conditions, the life insurance industry has implemented various life insurance options in the form of riders to address the issue. These riders include an accelerated benefits rider and a guaranteed acceptance insurability rider. An accelerated benefits rider will pay out some of the insurance policy’s death benefit if the insured is diagnosed with a terminal illness. And a guaranteed insurability rider ensures the policyholder can purchase additional life insurance even if they become uninsurable. Riders are affixed to traditional life insurance plans, which undergo medical questions and underwriting. Guaranteed acceptance policies do not.

Life insurance companies follow a meticulous method when issuing policies, and what goes up must come down. Having a life insurance policy with no health questions is superb; where it makes up for this superlative is the premiums and the death benefit. Premiums in a guaranteed acceptance insurance policy are more expensive than a conventional life insurance policy, and the policy comes with a lower and graded death benefit. A graded death benefit requires premiums to be paid for a period of time before the benefit amount can be paid.

Premiums in life insurance are subject to the underwriting process, which classifies applicants into three categories: standard risk, preferred risk, and substandard risk. A standard risk meets the insurer ‘s regulations as an acceptable risk (chance of loss), and you pay standard premium rates. A preferred risk means you are in excellent health, your habits and work environment are safe, and you have little or no family history of debilitating illness, resulting in lower premium rates. A substandard risk is a high risk to the insurer due to age, illness, or other factors, and premiums are higher. A guaranteed acceptance life insurance policy is most useful to people in this final classification.

Guaranteed acceptance life insurance is categorized as a final expense policy, which means the full death benefit is designed to cover end-of-life costs, such as medical bills and funeral expenses. Therefore, the amount of coverage is less than traditional whole life policies. The benefit is also a graded benefit, which means you are required to pay premiums for usually two to three years before a benefit will be paid. If you pass away before this time, your beneficiaries will usually receive the amount of the premiums you paid. This way, the insurance company protects itself from financial losses; if policyholders were to only pay a few months of premiums and receive a full death benefit, insurers would lose a lot of money.

Certain life insurance products can seem discriminatory toward people with medical conditions. That’s why guaranteed acceptance insurance policies are a necessary part of the life insurance market. They cover individuals who need them the most. These policies are best for older or high-risk individuals who do not qualify for traditional life insurance policies. Guaranteed acceptance insurance policies are considered “last resort” life insurance to ensure your loved ones do not bear the weight of financial burden due to your passing.

Guaranteed acceptance life insurance is a whole life insurance policy. This means coverage is permanent, and premiums are level throughout the life of the policy.

Though it is a type of whole life insurance policy, not all guaranteed acceptance life insurance policies accumulate cash value. Premiums are higher and are credited to the face amount of the death benefit. Policies are used to cover final expenses, such as burial costs, unpaid debt, medical bills, and mortgages. It is very rare to find a guaranteed acceptance term life insurance policy because term life policies are not permanent.

Best Companies Offering Guaranteed Acceptance Life Insurance

Life insurance policy owners are a community of people whose premiums protect one another. Let’s delve into the best life insurance companies whose communities support guaranteed acceptance life insurance.

#1 MetLife

MetLife offers guaranteed acceptance life insurance policies to people ages 45–75. The application process is by phone or online, with no health questions asked. The benefit amount is between $2,500 and $50,000 and builds cash value. The graded benefit period is two years unless you suffer an accidental death. MetLife guaranteed acceptance policies are a good fit for individuals who have waited until later in life to purchase a life insurance policy.

#2 Colonial Penn

Colonial Penn requires guaranteed acceptance insurance applicants to be between the ages of 50 and 80. The waiting time before the policy can be paid out is two years, and after one year, your policy will build cash value. Their premium rates are fixed, and they give you multiple payment options. Colonial Penn offers affordable coverage for individuals who would like their final expenses, such as funeral costs, unpaid debt, and medical bills, covered.

#3 TruStage

TruStage offers guaranteed acceptance whole life insurance through an online or mobile application. After the first payment is made on the policy, the insurance coverage starts immediately and cannot be canceled as long as the premiums are paid. TruStage has strong financial backing and has been in business for decades. TruStage is also designed for people who want to ensure their final expenses are not a burden on their loved ones.

#4 Mutual of Omaha

Mutual of Omaha provides a full death benefit after two years of paying premiums and immediately if your death is accidental. If you pass away before the graded benefit waiting period ends, beneficiaries will receive all the premiums paid with 10 percent interest. The policies grow cash value, and applicants must be 45–85 years of age (or 50–75 years of age in New York) to apply. Mutual of Omaha guaranteed acceptance policies are a good fit for people who have waited until later in life to purchase an insurance policy with a savings feature.

#5 AIG

AIG Direct accommodates seniors with guaranteed life insurance policies. You must be between the ages of 50 and 80 to apply, and the insurance is meant to cover end-of-life expenses like funeral costs and debts such as credit card debt. The guaranteed acceptance policies include living benefits for chronic and terminal illness to cover the cost of treatment and/or nursing home care, with a benefit amount of up to $25,000, which begins 48 hours after acceptance. AIG ‘s guaranteed acceptance policies are great for people who would like living benefits for chronic or terminal illness.

#6 Gerber Life

Gerber’s guaranteed acceptance life insurance offers policies to people between the ages of 50 and 80. The policies accumulate cash value that you can take a loan from at an 8 percent interest rate. If you pass away in the first two years of the policy, beneficiaries receive premiums paid plus 10 percent. Their policies are tailored for final expenses, such as burial costs and debt. Gerber guaranteed acceptance policies are appropriate for seniors who would like a cash value option with the ability to take out a loan against it.

Buy the Best Life Insurance for The Best Price

Life insurance products are like fitting pieces together in a puzzle. The right fit creates a landscape that fits your needs. With Insurify, you can compare quotes to figure out the limits of your needed insurance coverage.

Use the Insurify website to aid in finding how much insurance to buy at the right price for you.

Guaranteed Acceptance Life Insurance: Frequently Asked Questions

What is guaranteed acceptance life insurance?

Guaranteed acceptance life insurance is a whole life final expense policy that does not undergo medical underwriting. Acceptance is guaranteed and people are rarely turned down. Individuals with health issues or who have waited until later in life to purchase a life insurance policy are the best fit for this type of insurance. Because premiums are usually higher than whole life policies, consumers aren't advised to purchase these types of policies unless all other options are exhausted.

How much does guaranteed life insurance cost?

Because there is no medical underwriting, the insurer automatically presumes you are a substandard risk. A substandard risk is a high risk of loss to the insurance company. Due to this, policy premiums are more expensive than conventional whole life insurance policies. Less expensive premiums in a guaranteed acceptance policy mean a lower death benefit.

Which company has the best guaranteed acceptance life insurance?

The best guaranteed acceptance insurance policy for you depends on your needs. MetLife has a benefit rate that is twice the amount of some insurance policies and has a savings component. AIG is unique in the way it offers living benefits and long-term care, and Gerber allows you to take out policy loans on the cash value. Which company has the best guaranteed acceptance policy depends on which is the best fit for your circumstances.

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Aissa Martell
Written by
Aissa Martell

Insurance Writer

Aissa Martell is a licensed insurance producer in the State of New York. She is a creative writer and has been freelance writing for five years. She’s happy to share her knowledge of the insurance industry and its products.

Learn More
John Leach
Edited by
John Leach

Insurance Content Editor at Insurify

Photo of an Insurify author
Edited by
John Leach
Insurance Content Editor at Insurify
John Leach is an insurance content editor who has worked in print and online. He has years of experience in car and home insurance and strives to make these topics easy to understand for everyone. He has a linguistics degree from UC Santa Barbara.