Guaranteed Issue Life Insurance Waiting Period: 2-Year Rule & Allstate’s Immediate Coverage

Last Updated: September 26, 2025 | Written by President of Term Life Online – AU, AAI, ARM

Typical Waiting Period Rules

• Two-Year Graded Period: Most insurers require a two-year waiting period before the policy pays the full death benefit for natural causes.
• Accidental Death Covered Day One: If the insured dies in an accident, the full death benefit is paid immediately, even during the waiting period.
• Return of Premium Plus Interest: If death occurs from natural causes during the waiting period, beneficiaries typically receive a refund of premiums paid, plus a small interest amount.

The Notable Exception: Allstate Benefits

While the two-year rule is standard, Allstate Benefits offers a standout alternative. Their guaranteed issue product provides up to $75,000 of coverage with immediate protection starting the first day of the month after your policy begins. That means your loved ones could receive the full benefit without waiting two years, as long as premiums are paid. Get a FREE Quote.

Eligibility Requirements for Guaranteed Issue Life Insurance

Mutual of Omaha Guaranteed Issue

Knowing if you qualify is just as important as understanding the waiting period. Below are common age ranges for two leading carriers:

• Eligible Ages: 45 to 85
• Health Questions: None—approval is guaranteed.
• Coverage Amounts: Typically, $2,000 to $25,000, depending on state.
• Waiting Period: Standard two-year graded death benefit for natural causes; accidental death covered day one.
• Start Your FREE Quote

Allstate Benefits Guaranteed Issue

• Eligible Ages: 18 to 70
• Health Questions: None—automatic approval.
• Coverage Amounts: Up to$75,000.
• Waiting Period: No two-year delay—full protection begins the first day of the month after your policy starts.
• Start Your FREE Quote

NOTE: To qualify, applicants must be working at least 20 hours per week and not collecting any form of disability income or SSDI.

No Waiting Period: The policy goes In Force on the first day of the month after it's purchased. For example, if the policy was purchased during the month of January, it would be active February 1st.

Key Takeaways

• You must be within the specified age range to apply.
• No medical exams or health questions are required for either company.
• Allstate Benefits is one of the few nationwide options with immediate full death benefit coverage.

Real-Life Guaranteed-Issue Coverage Examples

Maria, Age 67

Maria has a heart condition and was declined for traditional life insurance. She purchases a $15,000 guaranteed issue policy with a two-year waiting period. When she passes away from a stroke 14 months later, her beneficiaries receive a full refund of all premiums plus interest, because the death was from natural causes and occurred within the waiting period.

James, Age 59

James wants quick protection while between jobs. He buys a$25,000 guaranteed issue policy. Six months later he dies in a car accident. Even though he’s within the waiting period, his family collects theentire $25,000 death benefit immediately because accidental death is covered from day one.

Denise, Age 63

Denise applies for Allstate Benefits guaranteed issue coverage for $75,000. Her policy becomes active on July 1, and the immediate-coverage feature starts on August 1. Tragically, she suffers a fatal heart attack that same August. Her beneficiaries receive thefull $75,000 payout, since Allstate provides first-month full protection without a two-year delay.

Why the Waiting Period Exists

The waiting period protects insurers from immediate high claims, which helps keep guaranteed approval possible—even for applicants with serious health concerns.

Frequently Asked Questions

1. Does Guaranteed Issue Life Insurance Always Have a Waiting Period?

Most guaranteed issue policies include atwo-year waiting period before they pay the full death benefit for natural causes. Accidental death is typically covered from day one.

2. Why Do Insurers Require a Waiting Period?

The waiting period protects insurers from large, immediate claims. Because guaranteed issue plans accept everyone without medical exams, this safeguard keeps premiums affordable.

3. Are There Any Companies with No Waiting Period?

Yes. Allstate Benefits stands out by offering up to $75,000 of coverage with full protection starting the first day of the month after your policy begins, provided premiums are paid.

4. What Happens If the Insured Dies During the Waiting Period?

For natural causes, most carriers refund the premiums paid plus a small interest amount. If the death is accidental, the full face value is usually paid immediately.

5. Can I Shorten the Waiting Period by Paying More?

Generally, no. The two-year rule is built into the policy design. If you want immediate protection, look for carriers—like Allstate Benefits—that advertise no waiting period from the start.

6. Is Accidental Death Really Covered from Day One?

Yes. Accidental death benefits begin immediately with virtually all guaranteed issue life insurance policies, even during the waiting period for natural causes.

Key Takeaways

• Most guaranteed issue policies do have a two-year waiting period for natural death benefits.
• Accidental deaths are usually covered from day one.
• Allstate Benefits currently offers one of the few nationwide options with first-month full coverage.

Summary

In short, most guaranteed issue life insurance policies include a two-year waiting period for natural deaths, with accidental deaths covered immediately.

During that time, beneficiaries usually receive a refund of premiums plus interest if the insured passes away from natural causes.

For applicants who need faster full benefits, Allstate Benefits stands out by offering immediate protection up to $75,000 once the policy takes effect the following month—making it one of the few options for true first-month coverage.

Guaranteed Issue Life Insurance Quotes

Top Pick – United of Omaha

United of Omaha offers guaranteed acceptance whole life insurance for people age 45 to 85. Choose $3,000 up to $25,000 of coverage. Rates start as low as $8.80 per month. There’s no medical exam and no health questions. You cannot be turned down. You can get a quote and apply online now. Start Here to get a FREE Quote. 

Highly Recommended – Allstate Benefits Insurance Company

Allstate Benefit's Guaranteed Acceptance policy offers $10,000 to $75,000 of coverage to working applicants between the ages of 18 and 70. Rates start as low as $9.65 per month. There’s no medical exam and no health questions. You cannot be turned down. You can get a quote and apply today. Start Here to get a FREE Quote.

NOTE: To qualify, applicants must be working at least 20 hours per week and not collecting any form of disability income or SSDI.

No Waiting Period: The policy goes In Force on the first day of the month after it's purchased. For example, if the policy was purchased during the month of January, it would be active February 1st.

Resources:

• Guide to Guaranteed Acceptance Life Insurance
• Tips for Buying Guaranteed Issue Life Insurance
• Guaranteed Issue Life Insurance FAQs
• Pros and Cons of Guaranteed Issue Life Insurance
• A.M. Best Company: Compare financial strength ratings of life insurance companies
• Life Happens.org: Learn about life insurance and review facts.

About Our Methodology

Reviewed By: President of Term Life Online – AU, AAI, ARM

• 30+ years of experience in insurance planning

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