insurance

Skip This Pitch

Life insurance with no questions asked is a pricey last resort.

You've probably seen commercials for guaranteed life-insurance policies, such as those from ColonialPenn. The key promises: No questions about your health, and no way you'll be turned down.

It's true that as long as you're of a certain age (50 to 85 in most states), companies that offer guaranteed-acceptance policies will not reject you. But that doesn't mean you should sign up.

These plans don't require medical examinations, so insurers have to assume everyone is a health risk and set premiums accordingly, explains R. Jan Pinney, an insurance agent in Roseville, Cal. A ColonialPenn policy that does not guarantee acceptance (and does ask health questions) could provide a healthy 50-year-old male with 75% more coverage for about the same cost.

Guarantees often come with strings attached, such as benefit limits in the early years of a policy. These policies were designed for seniors in declining health who don't qualify for alternatives. Everyone else should get a medical exam for the chance to get a better rate.

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