life insurance

Graded Life Insurance

Graded Life Insurance is used to insure people, when they are turned down by an life insurance company because of health reasons. It can also be recommended by an agent, when a person is clearly uninsurable. Sometimes you may be required to live a certain length of time, to enjoy the full death benefit.

If you have been turned down for life insurance, you may still be eligible for coverage. Unless you are diagnosed with an illness that is terminal, you probably will qualify for Graded Life Insurance. You will not be required to take a physical. The insurance company will accept your Graded Life application or simply reject it.

There is a small catch to purchasing this type of insurance policy. It will cost more than the normal policy that you could buy for the same face amount. However it could be said that Graded Life Insurance should be considered a last resort policy. The policy is also not for those in a nursing home or hospice. Graded Life Insurance could be useful to someone who has three or more health conditions that are not terminal, but are not a good risk for an insurance company. For example a person who is slightly overweight, has high cholesterol, and is a diabetic who takes insulin, probably is a decline from most life insurance companies. However this same person will more than likely qualify for Graded Life Insurance.

The policy can have a provision that states the insured has to live two or three years in order for the beneficiary to receive the full death benefit. Often the Graded Life Policy will pay the beneficiary, the premiums plus 8 to 12% if the insured dies before the death benefit becomes whole. While Graded Life Insurance may be more expensive than regular whole life, it is for those not in good health. It is to be used as a viable option, when people cannot qualify for insurance coverage otherwise.