Keep in mind these policies have a two
year graded benefit period, which means they do not pay the full death benefit until 24 months.
If the insured were to die after the 2
year graded benefit period, more than 2 years after buying the policy, the beneficiary receives the full death benefit of $ 20,000.
In the event that you are diagnosed with a chronic or terminal illness after the two
year graded benefit period, included riders in the policy allow for you to access portions of the death benefits early to help offset additional costs that arise due to your condition.
If a health - related death occurs before
the graded benefit period ends, the policy will only pay a percentage of the death benefit.
Some policies will pay out the full - face amount during
the graded benefits period in the case of an accidental death (such as a car crash), but not all guaranteed issue policies offer this feature and the definition of «accidental causes» is usually quite limited.
The thing to be aware of is that the guaranteed acceptance policies have
a graded benefit period of at least 2 years.
After that, guaranteed issue life insurance may be worth it if you are healthy enough to survive past
the graded benefits period (typically two years).
If the death occurs before
the graded benefit period has passed the typical benefit is a return of all of the premiums paid to date plus a small amount of interest on the premiums.
For the beneficiaries to receive the full death benefits stated in the policy, the insured must live past
the graded benefit period.
With a graded benefit, you receive a refund plus interest (up to 10 % and varies by company) on the premiums paid if there is a death within
the graded benefit period.
A two - and three - year
graded benefit period are most common.
Other insurers may pay a percentage of the death benefit if you pass away before the end of
the graded benefit period.
If the applicant passes away during the limited or
graded benefit period (first two or three years of the policy) from anything other than an accident, then the death benefit will not be paid, just the premiums paid will be returned with some interest to the beneficiary.
If you had a policy like that and died during
the graded benefit period your beneficiaries would receive a refund of all premiums plus interest.
Silver Premium Choice is available in two plans; Preferred, which has an immediate death benefit available and Graded, which has a 2 — year
graded benefit period.