The managing partner of Total Retirement Security Planning and Mentoring Group, Edward J. Wendol brought 20 years of experience to the firm when he founded it in 2009. After earning his bachelor’s degree from New York’s Hofstra University, Edward Wendol earned his Series 7 license and worked as a registered representative, managing client portfolios and training new agents. Ed Wendol later shifted to insurance, and works today to help his clients develop solutions to help protect their assets in retirement and pass them along to the next generation.
It’s often the case that people who have life insurance provided by their employer do not purchase any other life insurance. When they retire, though, they find that the only way they can keep the insurance is to convert it to whole life insurance for a cost that exceeds their budgets. Many find other coverage at an affordable price, but those with significant health issues like cancer, a heart condition, or insulin-dependent diabetes, among many others, often find themselves turned down by every company to which they apply for life insurance.
To address this particular market, some insurance companies offer guaranteed-issue life insurance, either whole-life or term. Anyone who applies for coverage and pays the premium is guaranteed to be issued a policy. The death benefits are relatively small, in many cases no more than $10,000 or so, and the premiums are relatively high when compared to those of policies issued to applicants in good health. In addition, the insurance companies won’t pay the full death benefit if the insured dies before a certain period of time has elapsed since the policy was issued, usually from two to four years. The death benefit paid for policyholders who die before that time is the sum of all premiums paid for the policy, plus interest.
Guaranteed-issue life insurance policies aren’t designed to help a family pay off a mortgage when the insured dies, or fund a college education. Instead, most people buy them to help their families cover funeral and other costs.