Guaranteed Versus Non-Guaranteed Life Insurance

Key Takeaway
  • Guaranteed issue life insurance (also called guaranteed acceptance life insurance) often has no underwriting process to accept applicants, but it may require policyholders to fall within a certain age window. 
  • Non-guaranteed life insurance may offer lower monthly premiums and provide additional benefits not typically available in guaranteed issue life insurance policies.
  • Guaranteed issue life insurance is often best suited for individuals with serious medical issues who otherwise might have difficulty qualifying for a traditional life insurance polcies.
Guaranteed Versus Non-Guaranteed Life Insurance

Whether you want life insurance to leave a legacy behind for your loved ones or are seeking cash value growth, life insurance is an investment that can help you reach your goals. Both guaranteed issue life insurance and non-guaranteed life insurance are types of permanent life insurance.  

With guaranteed issue life insurance, policy applicants usually bypass the medical underwriting process and pay a somewhat higher premium, with a lower amount of coverage. In non-guaranteed life insurance policies, applicants usually undergo an underwriting process.

In this article, we’ll explore how guaranteed life insurance works and compare it with non-guaranteed life insurance policies.

What Is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance is a form of permanent life insurance that does not lapse so long as premiums are being paid in full and on time, and it is typically available in smaller face amounts. The premium remains the same amount for the duration of the policy, but fees and other charges may be subject to change.

A key benefit of guaranteed issue life insurance is that there is usually no underwriting process. In traditional life insurance policies, insurers will typically require applicants to undergo a medical exam, send medical or prescription records, or fill out a health-related questionnaire. This process helps underwriters determine whether or not they can provide coverage to the applicant, what their premium rates will be, and other factors that may impact what kinds of policies would be available to them.

With a guaranteed issue life insurance policy, policyholders bypass this process and typically pay a higher premium with a lower coverage amount to compensate for the risk the insurer assumes by accepting them as a policyholder. You can choose to own more than one guaranteed life insurance policy if the cost of the premium is not of concern,.

Another benefit that can offset the higher premium is that guaranteed issue life insurance provides a guaranteed death benefit, so long as the policyholder follows the terms and conditions of the policy, such as contestability periods. 

What Is Non-Guaranteed Life Insurance?

Non-guaranteed life insurance has more flexibility, but that is offset by premiums that are typically more expensive. For example, the premium rate you pay during the first few years of the policy may increase later depending on relevant market scenarios.

This type of policy still provides coverage for life or until the policy's maturity date, and carries a death benefit much like other life insurance policies. These policies may also build cash value, which can also contribute to higher premium costs as compared to guaranteed issue life insurance products.

Key Differences

Because non-guaranteed life insurance policies often rely on market interest rates, your cost of coverage is not fixed, and your premiums may increase – but these policies also have a cash value component. This causes non-guaranteed policies to usually cost more than guaranteed life insurance policies over time. While non-guaranteed life insurance is considered a permanent life insurance policy, many policyholders become priced out of their policies due to the increase in premiums.

On the other hand, guaranteed life insurance maintains stable premiums with costs that may be more affordable. Your rates and coverage will remain stable.

Which Is Right for You?

Navigating the world of life insurance can be daunting, with policies that offer several features that may sound appealing, but may not align with your unique goals. Both guaranteed issue and non-guaranteed life insurance policies come equipped with their own set of benefits and challenges, but they aren’t the only options.


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Guarantees are backed by the claims-paying ability of the issuing insurance company. 

The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company.

Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Policies are issued by Everly Life Insurance Company (“Everly Life”), Topeka, KS. Everly Life is not licensed in the state of New York and does not solicit or transact business in New York.

A.M. Best's 15 ratings are a measure of claims-paying ability and range from A++ (Superior) to F (in Liquidation). Ratings are current as of January 25, 2024 and subject to change at any time. While ratings can be objective indicators of an insurance company's financial strength and can provide a relative measure to help select among insurance companies, they are not guarantees of the future financial strength and/or claims-paying ability of a company and do not apply to any underlying variable portfolios. The insurance agency from which a policy is purchased, and any affiliates of those entities, make no representations regarding the quality of the analysis conducted by the rating agencies. The rating agencies are not affiliated with the above-mentioned entities, nor are these entities involved in any rating agency's analysis of the insurance companies.

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