Graded Death Benefit Life Insurance Policy

Graded death benefit life insurance policies are a godsend for some people.

Specifically for those who can’t be approved for a standard policy.  You can be declined from life insurance from all other companies and still get life insurance through a graded death benefit plan.

The icing on the cake? There is no medical exam required for graded death benefit plans.

However, there are some downsides which we’ll discuss below.

We represent all the graded death benefit insurance carriers and in this article we’ll explain what “graded death benefit” life insurance is and how to secure the best graded death benefit life insurance policy available.

First, 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, it’s a life insurance policy with a waiting period.

As a consumer, there are 4 basic features you need to know about graded death benefit life insurance:

Graded Death Benefit 1. You don’t receive the full benefit for 2-3 years (depending on the company).  This is called the waiting period.

There are 2 types of graded policies: return of your premium during the first 2 years + interest OR 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.  It’s either a “Graded” or “Return of Premium + Interest” payment during the waiting period for beneifts.

You always want a “graded” policy if possible.  This means that you’re paid a percentage of the death benefit during the 2 year waiting period.  With “return of premium + interest” you’re refunded your premiums with typically a set (usually around 10%) interest rate.

From day 1 you’re paid more from a graded policy if something were to happen to you than an “return of premium + interest” policy.

We both know nothing will happen to you the first 2 years of the policy, but you never know.  Tomorrow is promised to know one.  So make sure you make this distinction when buying a graded death benefit policy.

3.  Rates are expensive compared to standard policies – you have to realize this is a higher risk policy.  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.  There are some health questions.  It’s not guaranteed acceptance (although there are guaranteed issue life insurance options available – they’re just more expensive).  Most people will qualify even with cancer, heart problems, strokes etc if it’s been 2 years since it happened.  Each company has different health questions so speak with your agent and they’ll place you in the lowest cost plan available for your situation.

And to clarify for #3, guaranteed acceptance life insurance with no health questions have a graded period as well.  So technically there are graded death benefit options that don’t have health questions, but we always try to get you approved with a plan that has a few health questions so you can pay a lower price.

How To Find The Best Graded Death Benefit Life Insurance Quotes

First of all, make sure you work with an 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 policies for a 66 year old male.

graded death benefit life insurance

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’d see if you can qualify for Gerber Life and because they’re guaranteed acceptance we’d most likely go with them in this situation.  If another carrier popped up on top, we’d see if you could qualify for them and if you couldn’t, we’d go down the list until we found the best priced carrier you could qualify for.

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

It’s as simple as that and we provide this service for all our clients.

Be Careful of Those “Special Offers”

There’s 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.  Talk about backend backlash! We’re looking at you Globe Life.

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 and all of these policies are more expensive than what we can secure from you on the open market.

Bottom Line

There are only a couple dozen companies that offer graded death benefit life insurance and has access to the most competitive ones.  If you’re looking to buy graded death benefit coverage, we’ll do the shopping for you.

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About Jeff Root

is the owner of He's an independent life insurance agent who has helped 1,000's of consumers purchase life insurance online and over the phone.

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michael anthony

looking for death benefit life insurance

July 11, 2016 at 3:35 pm
    Jeff Root

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

    July 11, 2016 at 3:54 pm
Joe Isenberg

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

October 9, 2016 at 12:38 am
    Jeff Root

    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.

    October 16, 2016 at 4:55 pm
Adreain Spiller

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

September 2, 2018 at 4:02 am
    Jeff Root

    Yes, she will.

    September 24, 2018 at 9:13 am
Shaunder G. Johnson

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

October 31, 2018 at 1:57 pm
    Jeff Root

    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.

    November 6, 2018 at 9:45 am
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