As frustrating as it may be, getting life insurance isn't an easy route for some of us. Cover can be restricted to people due to their age, health, lifestyle or occupation - even if you can get cover, it may be costly. But don’t fret, Guaranteed life insurance may be able to provide you with coverage, regardless of your circumstances.

This article covers any queries you may have such as:

What is guaranteed life insurance?

Guaranteed life insurance (also known as ‘guaranteed life acceptance’) works similarly to a standard whole of life insurance policy. The big difference is that it’s designed for people who may struggle to get accepted for life insurance cover. This can be due to a persons age or health.

As you get older, getting life insurance can become much more difficult, with companies assessing factors like your age, health and occupation.

With guaranteed life insurance - as the name suggests, you’re guaranteed acceptance for a life insurance policy regardless of your health or occupation.

When applying for fully medically underwritten Life Insurance, companies may require you to undergo a medical exam and will ask you some basic health and lifestyle questions - with guaranteed life insurance, this isn't the case.

It is available for those who may struggle to get a medically underwritten life insurance policy  or pay high costs for medically underwritten life insurance.

How does guaranteed life insurance work?

Just like any life insurance policy, guaranteed life insurance pays out a lump sum to your loved ones when you die. You have to keep paying your monthly premiums to stay covered, otherwise, the policy won't pay out on your death.

Though the payout is guaranteed, there are drawbacks to this type of policy. Some insurers may not pay out the full amount if you die within the first 12 months of taking out the policy. In other cases, they may only repay the premiums paid so far.

Most guaranteed life insurance policies are available for those who are:

  • Aged 50 & over - the age cap (the maximum age over 50 that you can be and still take out a policy) varies from provider to provider. If you’re a smoker, the age cap may be reduced.
     

  • A permanent resident of the UK - excluding the Channel Islands and the Isle of Man.

Do I need guaranteed life insurance?

There are several reasons why you maychoose guaranteed life insurance, including if:

  • You have any pre-existing medical conditions which make medically underwritten life insurance cost prohibitive or not possible to secure. 
     

  • You have high risk hobbies or an occupation which makes medically underwritten life insurance cost prohibitive or not possible to secure.
     

  • You are looking to secure cover quickly, without the need to complete lengthy medical forms or fulfil requirements for GP reports or medical screenings when applying for your policy. 

    If any of these apply to you, there is a chance that you’ll struggle to be accepted for a standard life insurance policy, which is why you may turn to guaranteed life insurance.

What are the pros & cons of guaranteed life insurance?

It doesn't matter what you are buying, it's always best to factor in the pros and cons of a product or service before you commit to it. You may already have some doubts about guaranteed life insurance, so sorting out the positives and negatives helps for a fresh perspective.

Pros

You are guaranteed acceptance - Not only is finding the right life insurance policy sometimes challenging, but it becomes even more difficult if you can't get accepted. This could be down to your age, health, lifestyle or occupation.

However, you are guaranteed acceptance with guaranteed life insurance - as long as you meet the insurance providers criteria (eg. UK resident, Over 50 years old [if applying for an Over 50s policy] etc.).

No medical exam is required - This is the beauty of guaranteed life insurance. Typically, for other types of life insurance, you will be asked health questions as well as looking into your family's medical history. If not that, then you will have to undertake a medical exam. Usually, the answers or results determine the cost of your policy and whether the insurer will offer you cover.

Easy to apply - As stated previously you don't need to answer any medical questions when applying for guaranteed life insurance - this makes the whole process a lot quicker and simpler.

Cons

High premiums - Guaranteed life insurance usually costs more than a standard life insurance policy. This is because the insurer is taking a higher risk by not checking your health.

Lower pay-outs - As stated above, your insurer is taking a higher risk when covering you. This means that the pay-out will be limited to what you would expect to get from a standard (fully medically underwritten) life insurance policy.

Reduced pay-out if you die early into the policy - If you die within the first year or two of the policy, your insurer may only pay back the premiums you've paid. This is used instead of the intended pay-out value to your loved ones.

Before taking out a policy, make sure you fully understand the terms & conditions, that way you and your family are aware of what you are covered for or entitled to.

Writing a guaranteed life insurance policy in trust

Thankfully, you will be able to write your guaranteed life insurance policy in trust. This is mainly to prevent it from being taxed when it eventually pays out. In some cases, a life insurance policy can be considered part of your estate and liable for inheritance tax.

In reality, you only need to consider this if the total value of your estate is likely to go over the inheritance tax cap. An important thing to note, if you write a life insurance policy into trust, it cannot be undone. Once you proceed, you won't be able to withdraw it later down the line.

For more information, check out our insightful guide on writing your policy in trust.

Struggling to find the right policy? We're happy to help.

Whether you're struggling to find the right policy for you and your family or have any queries about types of policies - we're always happy to help. Our specialists are always on hand to guide you through the process, finding the best policy whatever your circumstances are.

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 


01392 43 61 93(Monday to Friday, 9am - 5.30pm)

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