Guaranteed life vs WL policy

[jeffery_scott76]

Hi,

Could anyone tell me more about the difference between a guaranteed life & a whole life policy?
Is it true that a GL policy has a lower face value than the WL policy?
Regards,
Jeff

 

[Newby]

Hi,

Could anyone tell me more about the difference between a guaranteed life & a whole life policy?
Is it true that a GL policy has a lower face value than the WL policy?
Regards,
Jeff

GL usually stands for Graded Life or Guaranteed issue. That is for people with health issues and they don't qualify for standard rates or prefered rates.

When comparing the same premium dollar, the GL policy will have less face amount. It will also have a two or three year period where the death benefit is graded or just return of premium.

You should sell everyone the best coverage they qualify for health wise and only sell the guaranteed issue as needed.

 

[jeffery_scott76]

When comparing the same premium dollar, the GL policy will have less face amount.

What could be the consequences? Please elaborate!

Regards,
Jeff

 

[InsuranceJosh]

GL is for folks that cant get WL b/c of health.

You would never want to put somebody on GL if they could get WL insurance. The reason is that GL has a higher cost of insurance b/c of asking no health question (N.C. State law) or fewer health questions in other states.

 

[GreenSky]

I'm a little confused. Are we comparing WL to GUL? If so, the answers might be different.

Rick

 

[Newby]

I'm making the asumption you are talking about a guaranteed issue policy (no underwriting) compared to a standard whole-life policy with underwriting.

If that's the case, you sell the regular policy unless they don't qualify for any. Then you offer the guaranteed issue which will cost more.

 

[retread]

"One of the less known life insurance policies is the graded premium life insurance policy. This is a whole life type policy that starts out with a lower than usual premium which increases every year for a certain number of years and then levels off and remains level for as long as you own the policy. If a person desires to own permanent life insurance and is unable to afford the full premium initially then the graded premium life policy may be a fitting alternative. The graded premium life insurance policy is sometimes referred to as graduated premium life insurance." see
Graded Premium Life Insurance

I don't mean to muddy the waters, but in health and disability insurance there is a difference between a Standard policy, an Impaired Risk policy, and a High Risk pool.

If someone is "rated up" on a Standard policy, it can become unaffordable. The lowest rates are Preferred, the average joe is Standard, and those with some minor issues may be rated up further: "A, B, C, D" (D=denied) with consequent higher premiums.

If a federal or state law disallows consideration of health issues, (for example group insurance subscription or certain enrollment periods) IOW no u/w, then by default it is "guaranteed issue". Usually this results in higher premiums and can again lead to unaffordable coverage.

If underwriting denys someone a Standard policy, they can seek either another carrier with less strict u/w, which is usually referred to as "impaired risk" (there are companies that specialize in IR), or seek relief under their state's "High Risk" pool which can again, be unaffordable.

I understand this is true of Life, also. This is not my area, so someone correct me if need be.

My point is, don't try to force a square peg into a round hole. Find out first of all what the client needs, and try to fill that need affordably.

 

[Mr. Bill]

Frankly, I'm not understanding why anyone responds to his questions.

 

[retread]

Frankly, I'm not understanding why anyone responds to his questions.

I know, but perhaps there are viewers that may get confused with his misinformation, so I take the time to get "primal" for all the newbees.

But you are right.... anyone can google these questions before posting them here if all they want is to get basic info.

 

[Mr. Bill]

It's every question, nebulous and vapid. I know months ago I questioned whether or not he even has an insurance license. While I appreciate your earnestness, I believe it is in response to deceitfulness.