If your child has a hard time getting life insurance due to medical problems, you may only have one option left. Life insurance for children with medical issued may be issued on a guaranteed basis or with limited underwriting requirements. Discover the type of insurance you need to be researching so you can stop wasting your time with applications for life insurance that won't be approved.
Types
The type of life insurance that is required for children with serious medical problems is a guaranteed life insurance policy. Guaranteed or impaired risk policies allow parents to buy life insurance for their child when they otherwise wouldn't be able to do so. These policies may be available even if your child has serious medical problems like diabetes.
Significance
A short application is ,involved with a guaranteed policy. Generally, there is no medical exam needed. If a medical exam is required, it will be a simplified exam. The insurer bases rates for impaired risk policies on the nature of the illness, which you disclose when you fill out the application. The insurer then decides whether it can accept the risk and issues a policy if it can safely do so. Usually, the only conditions excluded from guaranteed policies are terminal illnesses.
Benefit
If you purchase a guaranteed policy, it will normally be a whole life policy. Even though whole life policies may be more expensive than other types of policies, you are assured that you have a policy that provides guaranteed death benefits and a guaranteed cash value savings. The savings portion of the policy may be used during your lifetime for any reason. The death benefit is payable in the same way that any other life insurance policy death benefit is payable.
Disadvantage
The disadvantage to guaranteed or impaired risk policies is that the premiums are higher than for ordinary life insurance policies. Guaranteed policies may be five to 10 times more expensive. This means that you may be able to afford less insurance than you otherwise would be able to afford. Or, to think of it another way, you receive less insurance for the same premium amount when compared with an ordinary life insurance policy.
On top of that, benefits are graded. This means that the death benefit does not equal the amount of insurance you initially purchase. Instead, the death benefit is equal to the premiums you pay plus an interest rate factor determined by the insurance company. This graded benefit increases over time until the benefit equals the actual death benefit of the policy.
Tags: death benefit, life insurance, life insurance, impaired risk, impaired risk policies, insurance policy, life insurance policy
