Speak with an experienced advisor! Have you applied for term life insurance in the past and been declined? If so, you may have alternatives to securing a term life insurance policy even if you are truly uninsurable.
Declined for Life Insurance? Get A Second Opinion
The first thing you should do if you have been declined for life insurance is to get a second opinion. The truth is that many life insurance companies are not aggressive with some types of medical conditions and may simply decline you without much consideration. Therefore, it is always wise for you to seek another alternative. And, if you are working with a professional life insurance broker, he or she should know, based on the findings on your initial application, the best path to take with respect to the selection of appropriate life insurance companies on the second attempt.
However, there are cases where you just may be uninsurable for ordinary term life insurance regardless of how many life insurance applications you make. In these cases, there maybe an alternative to securing a reasonable priced policy.
Life Insurance Alternatives if You Are Uninsurable
One such option is a graded benefit term life insurance policy. A graded benefit term policy may offer coverage when there are no other policy options. The concept of a graded benefit plan is simple. First there is no medical exam and very few health questions required to qualify. For more details on your ability to qualify see Qualifying for a Graded Benefit Term Life Policy.
How Do Graded Benefit Policies Payout?
Assuming you have applied, been approved and your policy is in effect, if you pass way within the first or second policy year, your beneficiary receives all premiums paid plus 30% Beginning in the third policy year, if you pass away, your beneficiary will receive 100% of the policy death benefit. If death occurs by accident in any policy year 100% of the death benefit is payable to your named beneficiary.
Graded Death Benefit Term Life Policy Options
Depending upon the insurance company, graded death benefit term plans may be available up to age 70 for 10 year level term plans and up to age 60 for 30 year level term policies. Minimum issue ages are normally age 20. Insurance amounts can be as low as $10,000 for ages 60 and above with a maximum of $50,000. For younger ages, minimum policies can be issued for $25,000 up to $250,000 in some cases. Level term plans can be purchased for 10, 20 or 30 years subject to age requirements. Policy riders may also be available. Graded benefit life insurance is considerably more expensive that regular term life but when there are no other options, the policies can be very attractive.
Summary
If you have experienced health problems and cannot qualify for life insurance with traditionally underwritten plans, a graded death benefit term policy may be just the answer to securing life insurance. There are no exams an very few medical questions that must be answered to qualify and while death benefits are not fully payable until the third policy year, there is 100% coverage from and accidental death from the initial policy date. If ordinary term life insurance is not an option due to medical issues, you should definitely investigate a graded benefit term life insurance policy.
