What Is Guaranteed Plan?

Guaranteed issue life insurance, or guaranteed acceptance life insurance, is a type of whole life insurance policy that does not require you to answer health questions, undergo a medical exam, or allow an insurance company to review your medical and prescription records. You may also see it referred to as “no questions life insurance” or “no questions final expense insurance.”
Sounds great, right? Here’s the catch. Guaranteed issue life insurance always has a waiting period. If you die during the waiting period, your beneficiaries will not receive the policy’s death benefit. With most policies the waiting period is two years. With some it's three.
This is not some kind of scam. In fact, if you die during the waiting period, the insurance company will repay (to your beneficiaries) all your insurance premiums plus interest, usually at a rate of 10%.

Key Takeaways

• Guaranteed issue life insurance is a small whole life insurance policy with no health qualifications.
• It pays a cash death benefit of ₹2,000 to ₹25,000 to the insured’s beneficiaries. Guaranteed issue life insurance does not pay death benefits during the first two or three years the policy is in force, but it does return the policy’s premiums plus 10% interest if the insured dies during this period.
• Guaranteed issue policies are designed for people with serious health conditions that keep them from buying policies that offer immediate death benefits. Compared with other types of life insurance, guaranteed policies generally have high premiums relative to their death benefits because their policyholders are in poor health.