What Is Guaranteed Life Insurance?

Guaranteed life insurance is a type of life insurance policy that you’re guaranteed to receive approval for, regardless of your health or other factors that might have prevented you from getting a traditional life insurance policy; the only reason you can be turned down is because of your age. Because insurance companies take on more risk when they issue guaranteed life insurance, coverage tends to be very limited. Maximum payouts are typically under $25,000, but can be as high as $50,000.

How does guaranteed life insurance work?

When you buy guaranteed life insurance, you won’t answer any questions about your health. You only choose the amount of coverage you want and answer a few simple questions about yourself. As long as you’re within the policy’s specified enrolment age—typically 45–75, but products exist for up to age 90—you’re guaranteed to be approved. Guaranteed life insurance costs much more than other life insurance products, and pays out much less when you die. Typically, death benefits are no more than $50,000 for natural death and $250,000 for accidental death. Guaranteed life insurance stays in effect until you die, as long as you continue to pay your premiums on time.


When should I buy guaranteed life insurance?

Guaranteed life insurance is best for people who need life insurance coverage, but have been turned down for traditional life insurance policies because of your health or other factors. Usually, guaranteed life insurance only pays the death benefit if you pass away more than two years after the policy takes effect. Conversely, higher premiums mean you could end up paying more than your death benefit if you live for a long time. That said, the younger you are when you sign up for guaranteed life insurance, the more coverage you’ll be able to buy at a lower price.


What factors influence guaranteed life insurance rates?

Guaranteed life insurance rates are only based on your age, sex, coverage amount, and whether you smoke. To learn more about what factors affect life insurance rates, see our education centre topic “What Is Life Insurance.”


What features should I look for?

In most cases, you won’t be able to purchase additional endorsements such as critical illness coverage on a guaranteed life insurance plan. Instead, look for guaranteed life insurance policies that offer features like:

  • Increased benefits for accidental death
  • Early payout if you develop a terminal illness
  • Shorter waiting periods before full coverage takes effect
  • Locked-in premiums that are guaranteed not to increase
  • Lifetime coverage that only requires you pay premiums to a certain age (usually 90 or 95)