A Detailed Guide To Graded Benefit Burial Insurancee Insurance Policies

The insurance sector has a wide range of life insurance plans, designed for catering to individual requirements belonging to all ages. It is likely you've heard of graded premium whole life insurance products, which promise to guarantee insurance coverage well into your elderly years without increasing premiums, in exchange for a small price. But how does it all work? And what is the difference between Graded and Level?

Graded Benefit Burial Insurance Overview

This policy is permanent in nature, compared to term policies that expire after a certain period has elapsed. However, what makes it different from "level" whole life policies is that this policy gets graded with the passage of time. What this means is that, should you pass away during the policy’s first 2 years, the policy’s beneficiary will receive only a percentage of the benefit or the premium payments along with interest. 

What This Means

If demise occurs during the first 2 years, depending on the time elapsed since purchase and the type of graded policy you recieved, your beneficiary will receive any where from premiums paid plus interest to 70% of the policy amount.

 Although this may not seem so attractive, please note that these policies are a near last resort for people with serious medical conditions. Additionally, the average interest rates range anywhere between 7%-10%. A few companies even offer a staggering 20% interest rate for the policy’s 2nd year.

This is significantly higher compared to what one can obtain from a bank, making it an attractive for applicants with no better options.

Do Note That...

Once the waiting period of 2 years has elapsed, the full policy goes into effect. If the death occurs after this period is over, the life insurance policy’s listed amount will be awarded fully to the beneficiary.

 Assuming a graded premium permanent life insurance provides a payout of $10000, the policy’s enforceability is in effect from the day 2 years has elapsed from date of purchase.Note that this date will appear prominently on the policy. 

Graded Premium Benefit Policy Important Details

You ought to be aware of a few key points before you take a final decision on the policy. If you’re weighing the pros and cons, it is vital you understand all details and offerings of this policy before taking a call on whether this policy works for you or not.

For Whom Is This Policy Ideal For?

While this policy may not be attractive for most people, its maximum benefits are usually derived by those afflicted with serious medical conditions.  

​If you suffer from any condition, which does not pose a threat at the moment but leaves the  level "day one" policies unavailable to you, that makes you an ideal candidate for availing graded benefit burial insurance.

Locked-In Premiums

Like all whole life plans, the advantage is that as long as you continue with the policy, your premiums will not change at all, regardless of whether your health fails, you switch jobs or change states. Premiums will never change, making whole life  attractive option for those who are comfortable with paying a stable amount throughout their lifetime.

No Medical Examinations Required

An additional benefit of simplified issue policies, whether graded or level, is that one does not have to take any medical examinations. because simplified issue policies have liberal underwriting to account for the combination of medical conditions and no exam underwriting, these policies tend to be more expensive than fully underwritten ones.

Remember that this policy wasn’t designed with cheap premiums in mind. Its goal is to ensure consistent premium rates, regardless of age and other conditions. Since graded benefit whole insurance firms are incurring a greater risk by approving your application, you’ll have to pay higher insurance premiums. 

Reasons To Choose This Insurance Policy

There are several reasons to choose graded benefit individual whole life insurance policies. Those with the following attributes should especially consider this:

• Age 50-80
• Will not qualify for level "day one " coverage
• Has a progressively worsening medical condition
• Is likely to survive for the next 2 years
• Wishes to pay the same premium amounts every month throughout the policy’s lifespan

Can NODLB.com Help Me?

Absolutely! Remember to choose an independent insurance agent, like us at NODLB.com, who can provide you with quotes from various companies and get you the best budget-friendly rates. 

​We have access to several leading carriers in the insurance market, allowing us to get you the most favorable rates. Engage our services at NODLB.com and let us take care of your insurance requirements.

Your Next Step

Thank you for choosing No Debt Left Behind to research Graded Life Insurance Options. Should you have any questions please do not hesitate to call or send over an email.