By Marc Gilman — July 11, 2026
For additional information, please call: (800) 927-9326 or email:
Final expense insurance exists to do one job well: make sure funeral costs, medical bills or other end-of-life expenses don’t land on your family. But not every final expense policy is priced — or structured — the same way. The two most common paths are a level premium policy, underwritten with a few health questions, and a guaranteed issue policy, which asks no health questions at all.
Guaranteed issue sounds like the easier choice, and for some people it’s the only option. But it typically costs more for the same coverage, and it comes with a waiting period most people don’t fully understand until it’s explained to them. If you can qualify for a level premium policy, it’s usually the better deal — here’s why.
Key Takeaways:
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Level premium final expense policies are underwritten with health questions, but no medical exam.
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Guaranteed issue policies ask no health questions, but often cost 30–50% more for the same coverage amount.
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Guaranteed issue policies include a graded death benefit — typically 2 to 3 years — before the full benefit is payable for natural causes.
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During the graded period, most guaranteed issue policies still pay the full benefit for accidental death.
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Both policy types typically offer a level premium that never increases for life — the difference is underwriting and payout timing, not just price.
What Is Final Expense Life Insurance?
Final expense insurance is a small whole life policy, typically $5,000 to $25,000 in coverage, designed to cover funeral costs, medical bills or other expenses your family would otherwise have to pay out of pocket. It builds cash value over time, and — unlike term insurance — it doesn’t expire as long as premiums are paid.
What Does “Level Premium” Mean?
A level premium means your monthly payment is locked in for life. It doesn’t increase as you age or if your health changes after the policy is issued. Most final expense policies, whether level or guaranteed issue, offer a level premium — so the real distinction between the two isn’t about whether the price stays flat. It’s about how you qualify and when your full benefit becomes available.
When people in the insurance world say “level” final expense, they’re usually referring to a simplified issue policy: one that asks a handful of health questions but requires no medical exam. Because the insurer knows more about your health upfront, it can price the policy more accurately — and usually more affordably — and pay the full death benefit from day one.
What Is Guaranteed Issue Life Insurance?
Guaranteed issue final expense insurance asks no health questions and requires no exam. Nearly everyone within the eligible age range is approved, which makes it a real option for people with serious health conditions who wouldn’t qualify for a simplified issue policy.
That accessibility comes at a cost. Because the insurer is taking on risk without any health information, guaranteed issue premiums run higher — often 30% to 50% more than a simplified issue policy for the same coverage amount.
Why Does Guaranteed Issue Cost More for Less Coverage?
Consider a $10,000 policy for a 65-year-old. A simplified issue, level premium policy might run roughly $50 to $70 a month for a man, or $40 to $50 for a woman, depending on health and habits. A guaranteed issue policy for the same face amount, with the same insurer or a comparable one, is commonly 30% to 50% higher — for coverage that also pays out more slowly in the early years (see below).
In other words, guaranteed issue buyers often pay more each month for a benefit that’s temporarily worth less.
What Is a Graded Death Benefit — and Why Does It Matter?
This is the part of guaranteed issue insurance that catches families off guard. Nearly all guaranteed issue policies include a graded death benefit period, typically two to three years from the policy’s start date.
If the insured dies of natural causes — illness, for example — during that graded period, the policy typically doesn’t pay the full face amount. Instead, most policies return the premiums paid, plus a modest amount of interest (commonly around 10%), to the beneficiary. Only after the graded period ends does the policy pay the full death benefit for natural causes.
Accidental death is usually the exception. Most guaranteed issue policies pay the full face amount immediately for a covered accidental death, even during the graded period — it’s specifically death by illness or natural causes that’s limited in the early years.
A level premium, simplified issue policy generally has no such waiting period: the full death benefit is payable from the day coverage begins, for any covered cause of death.
When Does Guaranteed Issue Still Make Sense?
Guaranteed issue isn’t a bad product — it’s the right product for a specific situation. It tends to make the most sense when:
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Health conditions would result in a decline or a much higher rating on a simplified issue policy
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You’ve been declined for other final expense coverage in the past
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You’d rather have guaranteed approval today than risk being turned down elsewhere
For applicants in reasonably good health, though, a simplified issue policy with a level premium usually provides more coverage, faster full-benefit protection, and a lower monthly cost.
Which One Is Right for You?
The honest answer is: it depends on your health, not just your preference. Before assuming you need guaranteed issue, it’s worth finding out whether you’d actually qualify for a simplified issue policy — the health questions are often more forgiving than people expect, and the savings can be significant over the life of the policy.
Not sure which type of final expense policy fits your situation? Gilman Agency can walk you through your options at no cost — including whether you’d qualify for a lower-cost, level premium policy.
For additional information, please call: (800) 927-9326 or email:
