Ben Nguyen 
Guaranteed issue life insurance provides vital coverage for Canadians who don’t qualify for traditional policies. This type of insurance is guaranteed to be approved regardless of your health or medical history.
In this article, we’ll explain everything you need to know about guaranteed issue life insurance in Canada.
What is Guaranteed Issue Life Insurance?
Guaranteed issue life insurance, also known as guaranteed acceptance life insurance, is a type of coverage that does not require any medical examination or health questions to qualify. It is guaranteed that any applicant between certain ages will be approved for coverage.
With most regular life insurance policies, the insurance company reviews your medical history and declares you either insurable or uninsurable based on your level of health risks. Guaranteed issue life insurance skips this underwriting process entirely.
This makes it an attractive option for:
- Older individuals
- Those with pre-existing medical conditions
- Anyone who has previously been declined for life insurance coverage.
Guaranteed issue life insurance provides a fixed death benefit ranging from $5,000 to $25,000 that gets paid out to your beneficiaries when you pass away.
Types of Guaranteed Issue Life Insurance
Guaranteed Permanent Life Insurance
This insurance policy offers lifelong coverage as long as you continue to pay the premiums. Over time, the policy builds cash value that you can borrow against if the need arises. Additionally, the premium payments are fixed and will not increase over time.
Guaranteed Term Life Insurance
This provides pure death benefit protection for a set period of time, such as 10 or 20 years. It does not build cash value. Term guaranteed issue life insurance may be convertible to permanent coverage later on.
Final Expense Insurance
Also known as funeral insurance, this provides smaller death benefits from $5,000-$15,000. It is meant to cover immediate funeral and final expense costs.
Alternatives to Guaranteed Issue Life Insurance
For applicants in good health, regular life insurance policies can provide more coverage for lower premiums. Some alternatives include:
- Term life insurance – Provides temporary death benefit protection for 10, 20 or 30 years. Premiums are very affordable when you are young and healthy.
- Whole life insurance – Offers lifetime coverage and builds cash value that you can borrow against. Premiums are fixed.
- Universal life insurance – Allows you to adjust your death benefit and pay flexible premiums based on what you can afford.
These types of life insurance require a medical exam and review of your health background. But if approved, you get higher coverage at a lower cost compared to guaranteed issue policies.
How Guaranteed Issue Life Insurance Works
Guaranteed issue life insurance is simple to obtain. Here is an overview of the process:
- Apply Online or Over the Phone – No agent is needed. You can apply directly through insurance company websites or call their toll-free number.
- Get Instant Approval – Since there is no medical underwriting, you are automatically approved as long as you meet the age requirements.
- Select Your Coverage Amount – Most plans allow you to choose a death benefit from $5,000 up to $25,000.
- Pay Your Premiums – This can be paid monthly, quarterly or annually. Premiums are fixed and will not increase.
- Death Benefit Paid to Your Beneficiaries – After you pass away, your loved ones file a claim and receive the tax-free death benefit.
It’s an easy way to obtain coverage without any hassle.
When You May Need Guaranteed Issue Life Insurance
There are a few common scenarios where guaranteed issue life insurance can be beneficial:
If You’ve Been Declined for Regular Life Insurance
This provides a coverage option if you’ve been turned down for individual life insurance due to health conditions. Guaranteed issue policies are your safety net.
Want Coverage But Don’t Want Medical Exams
Some people want life insurance but don’t want to go through lab tests and exams. The guaranteed issue skips the hassle entirely.
Have Pre-Existing Medical Conditions
Guaranteed issue policies don’t require a health check for serious health conditions like cancer, heart disease, or diabetes.
Further reading: Life Insurance with Pre-Existing Conditions
Over Age 65
At this stage of life, regular coverage gets very expensive or is unavailable. Guaranteed issue life insurance provides an affordable option.
Further reading: Life Insurance for Seniors Over 60
Pros of Guaranteed Issue Life Insurance
Guaranteed issue life insurance offers a few advantages:
- Guaranteed Approval – No application can be declined since there is no underwriting. Your acceptance is assured.
- No Medical Exams Required – Many people want to avoid the hassle of lab tests and health exams. Guaranteed issue life insurance skips this process.
- Provides Options for Unhealthy Applicants – If you’ve been rejected elsewhere, this policy ensures you can get coverage.
For these reasons, guaranteed issue life insurance fills an important gap for older or higher-risk applicants who need coverage.
Cons of Guaranteed Issue Life Insurance
The trade-off for easy approval is that guaranteed issue life insurance has some drawbacks:
- More Expensive Premiums – With no underwriting, insurance companies charge higher premiums across the board. Healthy applicants pay more.
- Lower Coverage Amounts – Most policies max out at $25,000 in death benefits. People needing more coverage must buy multiple policies.
- Waiting Periods – Many guaranteed issue policies have a two or 3-year waiting period before the full death benefit is payable.
While more expensive and limited, for some applicants, guaranteed issue life insurance is their only viable option available.
Cost of Guaranteed Issue Life Insurance
Premiums for guaranteed issue life insurance are higher compared to regular policies. Exact rates vary between insurance companies, but some factors that impact costs are:
- Age – Older applicants pay higher premiums. (Check out Life Insurance Rates By Age Chart)
- Gender – Rates are different for males and females.
- Smoking Status – Smokers pay more than non-smokers.
- Coverage Amount – More coverage increases the premium costs.
Here are some sample monthly costs in Canada for a $25,000 guaranteed issue life insurance policy:
| Age | Male Non-Smoker | Female Non-Smoker |
|---|---|---|
| 50 | $75 | $50 |
| 60 | $125 | $90 |
| 70 | $300 | $150 |
After turning 65, expenses tend to increase considerably. Nonetheless, the rates can differ considerably based on the factors mentioned above.
Comparing Guaranteed Life Insurance Providers in Canada
When you’re in the market for guaranteed issue life insurance, it’s important to carefully compare the policies offered by a variety of insurance providers to ensure you find the best coverage for your needs. Some key differences may include:
- Monthly premium rates
- Maximum coverage amounts
- Length of waiting periods
- Policy exclusions
Here are some of the top life insurance companies in Canada offering guaranteed issue life insurance:
Work with an independent life insurance broker to shop and compare rates. Be sure to lock in coverage at a younger age to secure the lowest premiums possible.
Who Needs Guaranteed Issue Life Insurance?
Guaranteed issue life insurance specifically targets higher-risk individuals who are unable to qualify for regular coverage. This includes:
Seniors Over 65
Once you are in your 60’s and 70’s, regular life insurance gets very expensive due to increased health risks. Guaranteed issue policies provide affordable coverage options at this stage of life.
People With Health Conditions
Serious illnesses like heart disease or cancer make it impossible to pass the underwriting used for regular life insurance. The guaranteed issue is the solution.
Anyone Denied Regular Coverage
If you’ve applied for an individual life insurance policy only to be rejected, guaranteed issue life insurance ensures you can get the coverage you need.
While costs are higher, guaranteed issue life insurance provides necessary protection to those who are uninsurable or priced out of the regular life insurance market.
Tips for Buying Guaranteed Issue Life Insurance
Follow these tips to ensure you get the best guaranteed issue life insurance policy at the lowest price when purchasing:
- Lock In Rates Early – Premiums rise dramatically after age 65. Purchase coverage in your 50’s or 60’s to secure lower locked-in rates.
- Add Accidental Death Coverage – Many policies allow you to add a accidental death benefit for a small additional premium.
- Compare Quotes from At Least 3 Providers – Rates can vary greatly between insurance companies. Always shop around.
- Select an Appropriate Coverage Amount – Take into account final expenses, debts, and income replacement needs when choosing how much coverage to buy. Don’t skimp.
- Consider Inflation – The value of money declines over time due to inflation. It’s smart to buy more coverage than you think you need today.
How to Buy Guaranteed Issue Life Insurance
Apply Online Directly With the Insurance Company
Most life insurance providers allow you to get a quote and apply for coverage right on their website. It only takes about 10-15 minutes.
Apply Over the Phone
If you don’t want to use the online process, call the insurance company’s toll-free number and speak with a licensed representative. They can take your application over the phone.
Work With an Independent Agent
Agents who work with multiple insurance providers can help you compare rates and find the best policy. They guide you through the application process.
Select Your Coverage Amount
Choose an appropriate death benefit based on the amount of insurance you need. Most policies offer amounts from $5,000 to $25,000. Go with the maximum you can afford.
The application is simple since no medical questions or exam is required. Once approved, you just need to pay your premiums to keep the coverage in force.
Where to Buy Guaranteed Issue Life Insurance
You can buy guaranteed issue life insurance from a few different sources:
- Directly From Insurance Company – Apply on their website or call them.
- Independent Life Insurance Broker – An independent broker shops multiple insurers and helps you compare.
- Online Insurance Marketplace – Aggregator sites like Lifebuzz allow you to compare quotes.
Dealing directly with the insurance company is simplest. However, an independent broker provides advice and will compare policies across insurers to find you the best rate.
Shopping the rates on online insurance marketplaces also allows you to see multiple quotes side-by-side.
Further reading: How to Find the Best Life Insurance Broker
How to Make a Claim on Guaranteed Issue Life Insurance
Making a claim on a guaranteed issue life insurance policy involves:
- Contact the Insurance Company Promptly – Call them as soon as possible after the death. There is usually a phone number right on your policy documents.
- Provide the Required Documentation – This includes a certified death certificate and any other documentation the insurer requires to validate the claim.
- Insurance Company Pays Out Death Benefit – Once the claim is approved, the tax-free death benefit will be paid out to your designated beneficiaries.
- Settlement May Take 30-90 Days – After submitting all paperwork, insurers take 30-90 days to validate claims and issue the payout.
To make sure your loved ones get paid promptly, contact the insurance company right away and submit all required claim documents.
Conclusion
Guaranteed issue life insurance serves a valuable purpose for older or higher-risk individuals who don’t qualify for regular coverage. While premiums are higher and death benefits are lower compared to standard policies, guaranteed issue life insurance offers approved coverage to those who would otherwise be declined.
Following the tips in this guide will help you secure the best guaranteed issue life insurance policy at the lowest price. Shop rates from leading Canadian life insurance companies and speak with an independent broker to ensure you get the right coverage you need.
Visit Lifebuzz.ca to compare guaranteed issue life insurance quotes from top providers. Our licensed advisors are here to help you find the most affordable coverage that fits your needs and budget.
Frequently Asked Questions (FAQs)
Q: What is the maximum coverage amount I can get with guaranteed issue life insurance?
A: Most guaranteed issue life insurance policies max out at $25,000 in total coverage. You may be able to buy multiple policies from different insurers to get higher total coverage.
Q: Can I convert a guaranteed issue term life insurance policy to permanent insurance?
A: Some, but not all, guaranteed issue term life insurance policies can be converted to permanent insurance later on without new underwriting. Be sure to ask about conversion options when applying.
Q: Does guaranteed issue life insurance cover pre-existing medical conditions?
A: Yes, guaranteed issue life insurance will pay the full death benefit for any cause of death, including those related to pre-existing medical conditions that may have otherwise made you uninsurable.
Q: Is accidental death the only way my guaranteed issue policy will pay out during the waiting period?
A: Most guaranteed issue policies will only pay a limited benefit or refund your premiums during the waiting period unless your death is proven accidental - then the full amount is paid.
Q: What is the difference between guaranteed issue and guaranteed universal life insurance?
A: Guaranteed universal life insurance still requires limited underwriting, whereas guaranteed issues do not check your health at all. Guaranteed issue is easier to qualify for.
Q: Where can I find the cheapest guaranteed issue life insurance?
A: Your best bet is to use an independent broker or online comparison platform to shop for quotes from multiple providers. Compare rates to find the cheapest guaranteed issue life insurance.
Q: Who is the #1 provider for guaranteed issue life insurance in Canada?
A: Foresters Financial and Canada Protection Plan are two leading providers of guaranteed issue life insurance in the Canadian market with competitive rates.
Q: Can I renew my guaranteed issue life insurance policy after it expires?
A: Guaranteed issue life insurance provides permanent, lifetime coverage as long as you pay your premiums. It does not expire, so there is no need to renew the policy.
Q: How long does it take to process a claim on a guaranteed issue life insurance policy?
A: After submitting all the claim requirements, it typically takes insurers between 30-90 days to validate the documents, investigate if needed, and pay out the claim.
Q: Can I designate multiple beneficiaries for my guaranteed issue life insurance?
A: Yes, you can name multiple beneficiaries on your guaranteed issue life insurance policy. The death benefit is paid out according to the percentages you assign to each person.
Q: Will my guaranteed issue life insurance rates change if I start smoking?
Q: Will my guaranteed issue life insurance rates change if I start smoking?
Q: Can my guaranteed issue life insurance benefits be reduced if I develop a health condition?
A: No, your coverage cannot be reduced or cancelled due to any new health conditions once your guaranteed issue policy is in force. The death benefit is guaranteed.
Q: How do I determine the right amount of guaranteed issue life insurance to buy?
A: Consider final expenses, funeral costs, debts that need to be paid off, and how much income you want to replace for dependents. A broker can provide advice.
Q: What identification is required to apply for guaranteed issue life insurance?
A: You'll need to provide basic identification like your name, date of birth, social insurance number, address, and contact information. No medical records are required.
Q: Can non-residents or foreign citizens buy guaranteed issue life insurance in Canada?
A: Guaranteed issue life insurance is only available to Canadian residents and citizens. You must live in Canada legally to qualify for coverage.
Q: Are policy loans available on guaranteed issue permanent life insurance?
A: Some guaranteed issue whole life policies may accumulate a small cash value, which you can borrow against.
Q: How do I determine which insurer offers the best guaranteed issue life insurance rates?
A: Get quotes from a broker who shops multiple insurers. Be sure to compare premium costs for your specific age and coverage amount to find the best rate.
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