Maybe all the direct mailings and ads on the Internet have finally got you thinking that life insurance is something you had better purchase. Well it’s understandable, because if you have loved ones who would be negatively impacted by your sudden absence, a life insurance policy really is something you should look into. But maybe you know that your health is not perfect, or maybe you haven’t had a check up in years and the thought of a complete physical makes you a little nervous.
You have probably wondered what a so-called guaranteed life insurance policy is. It sounds like a way to be sure that you won’t be turned down when you apply for life insurance, and that is exactly what it is. Maybe you are a little skeptical because insurance companies advertise this guaranteed life insurance so aggressively. Well you should be skeptical. In this short article I will outline exactly why guaranteed insurance might not be the best way to go.
“Guaranteed” implies that there are no conditions getting insured. Clearly the condition that you as the customer would like to circumvent in this case is getting life insurance without having to go through a medical exam. But what will you have to pay for that privilege?
The insurance company has to charge you more for guaranteed acceptance life insurance because of the increased risk they are assuming, because your health is a total unknown to them. They have nothing to gauge their risk except the likelihood of the “average” person passing away during the term of policy they will sell you, if guaranteed term life insurance is when you are selecting. Obviously the category of “average” includes people who are in poor health. You will get your guaranteed issue life insurance but your premium payments will be high enough to cover the risk that the insurance company is taking in case you are unfortunately one of those people who are in below average health.
This may be a reasonable trade-off if your aren’t in the best shape, but the take-away from this article should be the following: even if you have a minor health condition or two, you may still be better off in taking a deep breath and getting the medical exam. If you can prove to the insurance company that you have no ailments that put you squarely in the “below average” health category, you can look forward to the prospect of lower life insurance premiums for years and possibly even decades.
And what if you are in good or even excellent health? In this case, for similar coverage your premium payments should definitely be lower than if you had not taken a medical exam. Guaranteed life insurance may be very tempting to you, but the prospect of paying lower premiums-over many years-should have you giving at least serious consideration to taking a medical exam before you purchase term life insurance. At the very least, don’t go “guaranteed” because the exam seems like to much trouble. The potential savings make it worthwhile.