A graded death benefit policy is a type of whole life insurance policy with a waiting period. It may be an option for people who are unable to be approved for standard life insurance. There is no medical exam required. People who have been declined for life insurance from all other companies can still get coverage through a graded benefit life insurance plan.
Graded death benefit policies have four basic features to be aware of:
Insurance companies are in the business of risk for profit. Guaranteed issue life insurance policies that require no medical exam and are issued to people with serious health problems expose insurance companies to the possibility of financial loss. The graded benefit period of 24 to 36 months helps protect carriers from the risk involved in issuing policies to people with serious medical conditions that create a higher risk of death within the first few years after the policy is issued.
A graded death benefit life insurance policy pays a lower amount if death occurs during the first few years after you purchase the policy. Unlike standard life insurance, the death benefit is only increased to the stated face amount after the policy has been in effect for two to three years. Graded death benefit life insurance is usually only purchased as a last resort by people with major health problems who cannot otherwise obtain life insurance. It is more expensive than standard life insurance, but easier to obtain and could be an option for you. Our agency is here to help you find the best option.