Guaranteed Life Insurance Explained

You often see commercials on television offering “Guaranteed Life Insurance”.  Those commercials are talking about Graded Death Benefit Life insurance and I think it is important to understand these types of life insurance contracts.You often see commercials on television offering “Guaranteed Life Insurance”.  Those commercials are talking about Graded Death Benefit Life insurance and I think it is important to understand these types of life insurance contracts

There are several different types of life insurance policies which are designed to meet the needs of individuals of all ages. You may have heard about graded premium whole life insurance that promises for a low price to guarantee coverage that holds the same premiums into your senior years. But what is graded death benefit insurance and is it a good fit for you?

 

What is Graded Death Benefit Life Insurance?

 

It is a permanent life insurance policy as opposed to a term policy that ends after a pre-designated period. What makes this type of life insurance different from standard permanent policies is that it is graded over time so that your premiums will not increase. This means that for the first two years of the policy itself if you should pass away the beneficiary will only receive the payments from the premiums and interests, but not the stated benefits. This means that for the first two years the beneficiary will not receive any more than what you paid in and the interest it has built up over that time frame. Although that may not sound like much, it should be noted that the average interest rate ranges from seven to ten percent with some insurers. This means that the interest rate is substantially higher than what you would find at a bank which is one reason why the policy is rather attractive for some.

 

Good candidates for a Graded death benefit are applicants who would not or can not qualify for medically underwritten life insurance contracts due to existing health concerns such as diabetes, recent cancers, cardiovascular issues, and some diseases.

 

It is a good idea to speak with a professional who can first see if you are qualified for “day 1” types of life insurance. If you do not qualify for a traditional plan, then a graded death benefit option may be a wise choice for you.

Speak Your Mind

*