Wednesday, July 15, 2009

How to Get Guaranteed Acceptance Life Insurance

It's possible to get life insurance even if you're sick, dying, or simply afraid of doctors

For many people, getting life insurance is a difficult and daunting task. Because life insurance companies are extremely analytical and very concerned with their potential financial risk, people with serious medical conditions are often forced to pay significantly higher premiums than their healthier peers, if they are even approved for coverage at all.

This fact has led many people to seek out alternatives to traditionally underwritten life insurance, namely guaranteed acceptance life insurance (GALI). Dozens of companies exist whose sole business is providing life insurance to those individuals who cannot obtain it through traditional means.

These companies make it much easier to purchase life insurance because they do not ask many medical questions, and there is never a physical medical exam required.

Step 1

Begin your investigation. Once you have determined that a GALI policy is right for your current situation, use the Internet to search for several companies that specialize in this type of policy.

Step 2

Compare premium rates. Because each company uses different internal accounting procedures and profit methodology, the cost for identical insurance coverage may vary quite dramatically from one to the next. Examine each company’s rates for your desired coverage amount, taking note of the premium differences.

Step 3

Request additional information. When you believe you’ve found a life insurance company that has a GALI policy that’s right for your situation, contact that company through its website and request additional information about both the company and the GALI policy.

Step 4

Review the company and policy information. After you receive the company’s package, read through all of the information pertaining to industry experience, financial stability ratings and the life insurance policy itself. If anything in the package makes you uncomfortable, do not proceed with purchasing an insurance policy from that particular carrier.

Step 5

Verify the company’s financial strength. Several companies exist whose purpose is to evaluate and analyze insurance carriers to determine their financial strength. Each insurance company is given a rating, either a number or a letter, which corresponds with the rating agency’s final opinion. It is always best to work with only those companies that are financially solid.

Step 6

Complete an application. Assuming that both the company and its product meet with your approval, contact the carrier again and ask for application paperwork for their GALI policy. Upon arrival, fill out the form completely and accurately as per the included instructions. Return it in the enclosed pre-paid envelope along with your initial monthly premium payment.

Step 7

Examine the actual life insurance contract. After the carrier has processed and approved your life insurance application, you will receive a formal life insurance policy in the mail. This policy is a legally binding contract between you and the insurance company. Most states allow for a 30-day “free look” period, wherein you may examine the contents of the actual life insurance contract. If at any point during that first month you are unhappy or unsatisfied, you may return the contract with no further explanation and receive a full refund of your premium payment.

Tips

Because most GALI policies limit the total amount of coverage you can purchase, it may be possible to purchase similar policies from multiple companies to create an aggregate total life insurance death benefit to suit your family’s needs.

The bulk of GALI policies are priced in terms of “units.” One unit is equal to $1,000 of life insurance coverage. Knowing this fact makes evaluating different policies from various companies much easier and more efficient.

Request that information about the insurance company and their products be sent to you through the United States Postal Service. Tangible, printed material is always safer because there is no chance of that same material disappearing from the Internet or changing at a later date.

Only purchase a GALI policy through an insurance company that has received a stability rating of “A” or better. There are certain insurance carriers that are in financial trouble, and often they will offer their products at a discounted rate to entice new customers. Any carrier not receiving an “A” rating is cause for concern due to poor internal management or other financial difficulties.

Warnings

Most GALI policies are more expensive than those that are traditionally underwritten. This is because a high percentage of individuals seeking GALI policies has been turned down by other life insurance carriers, indicating they are a statistical financial risk.

A large number of GALI policies have limited benefits. To combat their increased financial risk, the insurance carrier will often provide a much lower death benefit if the insured person dies within the first two or three years. If the policy stays active for longer than this period, then the benefit increases to the original amount.

References

Basics of Guaranteed Acceptance Life Insurance

Resources (Further Reading)

Standard & Poor’s Insurance Company Ratings
A.M. Best Rating Center




This article is a Twisted Nonsense Exclusive! (07/15/2009)