Which Graded Life Insurance Is Suitable for You?
Even if you are suffering from multiple medical conditions as long as it is not terminal you can avail of grade life insurance. People who are suffering from multiple medical conditions, such as having diabetes and obese at the same time may not be qualified for standard type of life coverage.
There are two types of graded life backing insurance. These are graded benefit insurance and graded premium life insurance. These types of life coverage insurances are whole life term life provisions also. Companies take risks for people who are insured in these types of life insurance. Here are the characteristics of these two types of graded life coverage insurance.
Graded premium life insurance:
This kind of insurance is suitable for people who have less income in their younger years. Policy holders pay less in the early years of the benefit than the later years until the amount of the policy is covered. The premium is lower compared to whole life term insurance but also gradually increases as the years pass by.
You can borrow money from the backing company as long as you are still paying for the policy. You can either choose to pay the loan back, deduct it from the life coverage amount and you will not lose the ownership of the policy even if you borrow up to 80% of the total insured amount.
If the company is performing will, you can receive dividends from this kind of policy. You can either choose not to claim the dividend so that it will earn interest, used at as a deduction for your payment for the premium or take it in cash.
The policyholder should have also undergone a complete medical exam.
Graded benefit life insurance:
This type of insurance is offered at lower amount compared to its face value.
This is suitable for people who have multiple medical conditions but not terminal.
The death benefit in the first three (3) years is lower compared to the amount applied for. But the benefit gradually increases up to the year that the full amount of death benefit is reached.
It can also be a whole life term or term life policy. Term life policy can be renewed and convertible to whole life.
Companies distribute the risk by selling this kind of insurance to other companies. This process is actually called reinsurance, whereby the insurer purchase graded benefit life backing insurance to other companies.
This is normally offered to people age 50 and above who have poor health condition. In this case, they pay higher amount of premium compared to those under standard life insurance policies.