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Graded Benefit Life Insurance
Graded Life Insurance

A graded life insurance policy is a type of policy that is often misunderstood because there is a "waiting period." It is permanent, whole life insurance that is typically for those who have been turned down for coverage before because of health reasons. If you've had cancer, a stroke, a heart attack, or some other health condition and you've been turned down for life insurance, then a graded life insurance policy might be right for you

Graded Life Insurance - How Does It Work?

With this type of policy the death benefit is "graded" for the first two to three years, depending on the company. This just means that there is a waiting period before the face value of the policy is fully payable. Some companies will pay out a percentage of the death benefit if you die within the first two years. Other companies may only return the premiums that have been paid into the policy. For example, if you die within the first year, your beneficiaries may only get 25% of the death  benefit or only the premiums that were paid in. If you die in the second year, your beneficiaries may get only 50% of the death benefit. By year three, most companies that offer graded life insurance will pay out 100% of the death benefit to your beneficiaries if you die.

There is one exception to this contingency and that is accidental death. If you die from an accident- a car accident, plane crash, or a fall for example- then the death benefit on your policy will be paid 100%, even if it occurs within the first two years.

Guaranteed Coverage - A From of Graded Life Insurance

A graded life insurance policy virtually guarantees your approval. Some companies will ask if you've been diagnosed with a terminal illness with a life expectancy less than 24 months, and other companies might not ask you any questions at all. The premiums for a graded life insurance policy will be higher than a traditional life insurance policy, but it is still a great way to provide peace of mind for you and your loved ones.

Features of Graded Life Insurance:

  • Up to $25,000 of whole life insurance (depending on the company)
  • Permanent insurance that builds cash value over time
  • Level premiums for that will never increase
  • No medical exam; just a few health questions on the application
  • Limited death benefit for the first two to three years
  • Some policies even guarantee your approval 

If you've been turned down for life inurance before or if you have some major health issues, then graded life insurance may be the best option for you.

The first step when you are looking for a  graded life insurance policy is to shop around. Rates can vary by as much as 70% from one company to another so it definitely pays to compare. Get a free no obligation quote for graded life insurance and compare multiple rates today.