We speak with a lot of clients that are considered by most companies to be uninsurable and they are looking for other affordable life insurance options. While not nearly as cost effective as a traditionally underwritten policy, there are guaranteed issue companies. These companies will write policies that are guaranteed to be issued, even if you are not insurable by traditional standards. These companies will charge a cost per thousand rate based upon your age. These per thousand costs will be significantly higher than and underwritten per thousand rate. If you are not insurable, you really don’t have any other choice than to pay it or not buy it. The other big drawback of this type of policy is the limitation on the death benefit amount. Usually the most that can be purchased is $50,000 of face amount.
Another great option is to try and get more coverage at your place of employment. Group life insurance is guaranteed issue and is usually going to be better terms than an individual guaranteed issue plan on the open market. On top of potential guaranteed issue plans, there are survivorship policies that can be issued with one unhealth spouse. If either the husband or wife are sick they may be able to buy a survivorship/second to die plan. This type of plan unfortunately doesn’t pay until the death of the second spouse, but it may be a good option if a client is not insurable. Survivorship is used heavily in estate planning and it is less expensive typically than other permanent plans.
1. Do you have a Group Life Insurance option?
Many employees/consumers have access to a Group life insurance plan that allows you to obtain life insurance no matter what your health conditions are. If you are unhealthy you might qualify or up to $250,000 of group life. You must also keep in mind that access for group life insurance is most likely offered through your spouse’s employee benefit plan.
2. Convert your group life insurance certificate to an individual certificate.
Most companies have a Group life insurance plan that allows you to convert your group policy to your own individual permanent policy. You get make this happen without going through an underwriting process. The Life company should be looking into your current age for the premium.
3. Buy second to die (survivorship life insurance) to get around underwriting.
Did you know that under a survivorship life insurance policy (second to die), a husband and wife are insured together and the benefit is paid only after the death of both individuals? If your spouse or significant other is healthy then you should be able have the life carrier write the policy on them. That is a great way to offer a solution for one healthy partner.
4. Guaranteed Life Insurance is now Possible.
Many insurance carriers now offer Guaranteed issue life policies that do not require you to take a medical exam; however, these applications may ask questions at the start and you must be highly truthful or risk having your coverage voided at a later date. Be sure to check with your insurance consultant or broker to discuss these plans in great detail. Most carriers only offer limited amounts of coverage. The higher end limit for face amount is close to $150,000.
