Rootfin
  • Menu
    • Life Insurance
      • Quotes By Age
      • The 10 Best Companies
      • Different Types of Policies
      • Life Insurance Company Reviews
      • No Medical Exam Life Insurance
      • High Risk Life Insurance
    • Other Insurance
      • Medicare
      • Annuities
    • Rootfin
      • Blog
      • About
      • Contact
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Graded Death Benefit Life Insurance Policy: What You Should Know Before Applying

by Jeff Root

Last Updated: September 2020

Graded death benefit life insurance policies are built for people who can’t be approved for a standard policy, usually due to health problems.

Almost anyone can get life insurance through a graded death benefit life insurance plan, and there is no medical exam required. However, there are some downsides to this type of life insurance which we’ll discuss below.

We have experience working with all the best graded death benefit life insurance carriers and have been helping people find coverage for years. In this article, we’ll explain what “graded death benefit” life insurance is and how to secure the best policy for you.

If you’re looking for quotes, the best thing to do is give us a call. We’ll compare all the top graded death benefit life insurance policies on the market for you.


What is a Graded Death Benefit Life Insurance Policy?

In short, a graded death benefit life insurance policy is a type of life insurance that includes a waiting period before the full death benefit is in force.

There are 4 basic features you need to know about graded death benefit life insurance:

1. You Won’t Receive the Full Death Benefit for 2-3 years

With graded death benefit life insurance, you have to wait for 2 to 3 years, depending on the company, before your beneficiary can receive the full death benefit. This is called the waiting period.Couple with a graded death benefit life insurance policy

If the insured person dies during this waiting period, one of the following things will happen.

  • The insurance company will return of your premiums paid so far + interest, usually 10%.
  • The insurance company will pay the beneficiary a percentage of the death benefit.

Either way, if an unexpected death happens within the first 2 years, your beneficiaries will still receive a tax-free benefit, it just won’t be for the full amount. Make sure your agent goes over this with you before you submit an application.

After the first 2-3 years, you receive the full benefit.

2. Choose a “Graded” Life Insurance Policy Over a “Return of Premium + Interest” Policy

You always want a “graded” policy if possible.

This means that you are paid a percentage of the death benefit during the 2-year waiting period. With “return of premium + interest,” you are refunded your premiums with typically a set interest rate (usually around 10%).

From day 1, you are paid more from a graded life insurance policy if something were to happen to you than a “return of premium + interest” policy.

3. Rates are More Expensive than Other Life Insurance Policies

Graded death benefit life insurance policies are considered a subset of high risk life insurance. This means these policies are more expensive than a traditional term or whole life insurance policy, for example.

Be honest with your agent about your health, and they will recommend the lowest cost graded death benefit life insurance plan.

The good news is the rates are guaranteed level for the rest of your life and it will build some cash value.

4. Graded Policies Have Some Health Questions

Most people will qualify for a graded death benefit life insurance policy, even with cancer, heart problems, strokes, etc. if it’s been 2 years since the event or diagnosis happened.

Each company has different health questions.

Guaranteed acceptance life insurance policies with no health questions have a graded period as well. So there are graded death benefit options that don’t have health questions, but those policies are more expensive, so it’s best to answer some health questions if you can qualify.


How To Find the Best Graded Death Benefit Life Insurance Quotes

First of all, make sure you work with an independent life insurance agent that has access to the best graded death benefit options available and has the ability to compare the rates side by side.

Below is a sample of 6 graded death benefit life insurance policies for a 66-year-old male.

graded death benefit life insurance quotes

Once your agent views the best rates based on your age, date of birth, gender, and smoking status, the next step would be to see if you qualify for the best quotes presented.

In the sample above, we would see if you can qualify for Gerber guaranteed issue life insurance because they are guaranteed acceptance.

Every graded death benefit life insurance policy has different qualifying questions, so the key to finding the rates is sorting through all the options available and finding the cheapest company that your unique risk fits into.

Be Careful of Those “Special Offers”

There are a lot of advertisements on the internet and TV offering coverage for $1 the first month. What they’re not telling you is this is a graded death benefit policy and rates will go up every 5 years. In our Globe Life Insurance review, you’ll see that they are one company known to do this.

You also have those commercials on TV from Colonial Penn, AARP, and MassMutual for guaranteed acceptance life insurance. These are presented as special offers but the details are in the fine print.

These are all graded policies these policies are almost always more expensive than what we can help you secure on the open market.

There are only a couple dozen companies that offer graded death benefit life insurance and our network of agents have access to the most competitive ones. If you’re looking to buy graded death benefit life insurance coverage, call us today to help.

About Jeff Root
Jeff Root
Jeff Root is the owner of Rootfin. He is an independent life insurance agent, licensed in all 50 states & the District of Columbia. Jeff is also licensed to sell disability insurance and medicare insurance. Jeff is an accomplished author and a speaker at industry-leading insurance conferences around the US. He has helped 1,000's of people purchase insurance online and over the phone.

Reader Interactions

Comments

  1. Avatarmichael anthony

    July 11, 2016 at 3:35 pm

    looking for death benefit life insurance

    Reply
    • Jeff RootJeff Root

      July 11, 2016 at 3:54 pm

      Give us a call or fill out our contact page and we’ll reach out. We’ll compare your options for you.

      Reply
  2. AvatarJoe Isenberg

    October 9, 2016 at 12:38 am

    My son has suffered heart failure. He is 23 years old. Is he eligible for Graded Death Benefit Life Insurance?

    Reply
    • Jeff RootJeff Root

      October 16, 2016 at 4:55 pm

      Joe, There is 1 company that will offer a graded death benefit policy for him. It’s a smaller, lesser known company but they have strong financials. Contact us for rates.

      Reply
  3. AvatarAdreain Spiller

    September 2, 2018 at 4:02 am

    My mom has severe emphysema. Will she qualify for a graded death benefit policy?

    Reply
    • Jeff RootJeff Root

      September 24, 2018 at 9:13 am

      Yes, she will.

      Reply
  4. AvatarShaunder G. Johnson

    October 31, 2018 at 1:57 pm

    Good Afternoon,

    My name is Shaunder and I was diagnosed with DCIS Breast cancer of the left breast – Stage 0 which means it’s encapulated in the milk ducts and hasn’t spread. Diagnosed this past July 2018. How can I qualify to get Life Insurance. Thank you so Kindly

    Reply
    • Jeff RootJeff Root

      November 6, 2018 at 9:45 am

      Hi Shaunder,

      Yes you can qualify for life insurance based on what you mentioned. Give us a call and we’ll go over the most favorable companies and their corresponding rates with you.

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Instant Life Insurance Quotes
  • Compare 20+ life insurance companies
  • Instantly view monthly payments
“A+" Rated Carriers Quoted
On The Next Screen
By pressing "Display Quotes" button, you agree to our privacy policy & consent for an affiliated agent of Rootfin to contact you at the phone number entered on this webpage using an automatic dialing system.

We protect families AND your information.

Enjoy peace of mind on our website knowing your data is protected with 128-bit encryption.

Rootfin
  • facebook
  • twitter
  • yelp
  • linkedin
Forbes logo

Categories

  • Life Insurance
  • Medicare Insurance
  • Annuities

Company

  • Home
  • Blog
  • About Rootfin
  • Contact

Legal

  • Terms of Use
  • Privacy Policy

© 2007-2023 Rootfin.com

100 Congress Ave, Suite 2000,
Austin, TX 78701
(888)430-7668

This site provides insurance information and quotes. The rates displayed are based on information provided by the insurance companies. It should be used for informational purposes only and is subject to change. No portion of Rootfin.com may be copied, published or distributed in any manner for any purpose without prior written authorization of the owner. We are insurance licensed in all 50 states & the District of Columbia.
Instant Life Insurance Quotes
  • Compare 20+ life insurance companies
  • Instantly view monthly payments

“A+” Rated Carriers Quoted
On The Next Screen


By pressing “Display Quotes” button, you agree to our privacy policy & consent for an affiliated agent of Rootfin to contact you at the phone number entered on this webpage using an automatic dialing system.