There are life insurance products on the market that are guarantee issue.  This means that it is guaranteed that you will be able to get covered by the plan even with health concerns.   This is obviously a good option for clients who have serious health issues and can’t qualify for a regular life insurance plan that is fully underwritten.   If you can qualify for an underwritten product, it will allow you to buy larger amounts of insurance and it will be much more cost effective.   With a guaranteed issue product you can expect to pay at least twice as much and be limited to purchasing about 50,000 in death benefit.   AARP offers a very popular guaranteed issue program.   Often times through group insurance you can get a larger amount of guarantee issue, but 50,000 is usually about the max in the individual market.   The caveat to most guarantee issue life insurance policies, is that they may not pay a death benefit in the first two or three years.  If something were to happen to the insured in the first couple years, the beneficiary would get all premiums paid in, plus interest.  While that is better than a sharp stick in the eye, it obviously provides no leverage in the first couple years.

Typically, we will work with clients on their specific underwriting situation and help them find the carrier (s) that will underwrite there issue the most favorably.   If they can qualify for the fully underwritten product, than we will go with that route.  If not, then we will go to guaranteed issue products and figure out the best fit.   Some clients don’t want to take the medical exam and we have options for that too.  This is more expensive than underwritten, but it is available.

We get calls all the time about AARP life insurance and that clients are interested in this.   The bottom line is that AARP has partnered with New York Life Insurance Company to offer life insurance to its members.  No medical exam is required and only 3 medical questions are asked on the application.  Since there is minimal underwriting the premiums are note going to be more than a fully underwritten product.   With that being said it may be of benefit to some to have a product not fully underwritten as health may be a concern.  If that is the case there are other companies that offer similar products that may be even more competitive.

Did you know that the life insurance carriers like when you buy term life insurance?  A lot of clients we speak with think  that it is the agenda of the insurance company to sell them permanent insurance because it costs more.  While of course life insurance carriers want you to buy permanent products, they are quite content when you buy term.   Only about 2 percent of term policies ever pay out a benefit and therefore it is highly profitable for them.   A good option for many is to buy a return of premium term product.   This allows you to have best of both worlds with term, but return of premium if you outlive the level term.  If you are not familiar with this option you should ask about it.  It is usually more beneficial the younger an insured is.