If you’re facing a serious medical diagnosis or approaching your later years, you might be starting to think about your final expenses. Though it’s not a pleasant event to plan for, many people feel some peace of mind from knowing that, when they do pass, they’re able to help their families lay them to rest without incurring significant debt, and may even be able to leave them some extra money to support their own financial futures. As you explore your options, you may have come across the topic of guaranteed life insurance.
What is Guaranteed Life Insurance?
If you’re not familiar with the term, guaranteed life insurance is largely exactly what its name suggests: It’s a way for people who have exhausted other options for insurance to be approved, mostly with no questions asked. While that may sound too good to be true on its face, guaranteed life insurance does come with both pros and cons. Here are a few:
What are the Pros of Guaranteed Life Insurance?
A serious medical condition like cancer usually restricts someone from applying for life insurance, as the company typically wouldn’t want to take on the liability of a policyholder who may not live long. Seniors also often have trouble being approved for traditional policies, which may have them seeking out alternatives, such as simplified whole life insurance, an option that allows applicants to be at a moderate health risk. However, many may not even qualify for that type of plan, which is why guaranteed life insurance can be a very valuable tool.
With such a plan, a policyholder does not have to answer any medical questions or undergo a medical exam, which are often tedious experiences that can significantly slow down the start of coverage. A guaranteed life insurance policy can give those who are facing serious medical—and, in turn, financial—challenges peace of mind, and quickly.
What are the Cons of Guaranteed Life Insurance?
While this type of policy can be a significant source of assistance for those in need, it does come with a price. In fact, the premiums for a guaranteed life insurance policy are usually considered one of the biggest drawbacks about this type of plan, as they often cost at least $200 a month. And while that is a significant investment, policyholders may not get much for what they’re paying, with the average death benefit under $10,000, a figure that barely covers average funeral costs. Plus, most guaranteed life insurance plans require that the individual own the policy for at least two years, which—in the case of a terminal illness—may not be possible.
Guaranteed life insurance has the potential to be a vital tool for older or critically ill individuals, but it does come with its drawbacks. With any significant investment, it’s important to evaluate all options and weigh both the pros and cons to make a smart financial decision.
Can you Borrow Money from Your Life Insurance Policy?
Life Credit’s Living Benefit Loans offer you an alternative to traditional life insurance policy payouts. Life Credit pays up to half of a person’s death benefit on his or her life insurance policy, regardless of the type of policy. Even if you are a term policyholder, you can borrow from your life insurance, if it has a value of at least $75,000. Contact us to learn how Life Credit’s Living Benefit Loans can help you manage medical emergencies and pay for high-cost treatments. Call us at 888-274-1777.