Graded Life Insurance is used to insure people who are not seen as eligible by life insurance companies primarily for health reasons. For certain classes of patients, for example cancer survivors, it can also be recommended by an agent, when a person is clearly uninsurable. Sometimes the insured may be required to live a certain length of time, to enjoy the full death benefit.

Even though the person may be turned down for insurance, he or she may still be eligible for some coverage. Unless the person seeking insurance is diagnosed with an illness that is terminal, he or she will qualify for Graded Life Insurance. While seeking graded life insurance a physical examination is not required. The insurance company will accept the Graded Life application or simply reject it.

It will cost more than the normal policy that the person could buy for the same face amount. The policy is not for those in a nursing home or hospice. Graded Life Insurance could be useful to someone who has that are not terminal, but are not a good risk for an insurance company. For example a person who obese, has high cholesterol, and is hypertensive will probably be denied insurance from most life insurance companies. However this same person will more than likely qualify for Graded Life Insurance.

The policy can have a provision that states the insured has to live two or three years in order for the beneficiary to receive the full death benefit. Often the Graded Life Policy will pay the beneficiary, the premiums plus 8 to 12% if the insured dies before the death benefit becomes whole. While Graded Life Insurance may be more expensive than regular whole life insurance, it is for those who are not in good health. It is to be used as a viable option, when people cannot qualify for insurance coverage otherwise.

North Coast Life's Graded Life is a two year graded death benefit whole life product. If death occurs in the first policy year, 25% of the ultimate death benefit is payable and 50% of the ultimate amount is payable in the second policy year. There is no reduction and the full ultimate amount is payable if death is accidental.

Graded Benefit Life offered by the Guarantee Trust Life Insurance Company is of two types:

• Graded Benefit Whole Life is a whole life insurance policy that has no routine medical requirements such as a paramedical exam or APS
• Graded Benefit Term is a renewable term policy that is convertible to whole life through age 64.

The Presidential Life Graded Benefit (whole) Life policy is issued on a guaranteed issue basis for ages 40 to 80.There are no medical questions, no medical examinations, and no medical tests required to obtain this coverage. The minimum policy face amount is $2,000, and the maximum, $50,000.

Benefits payable under the Graded Benefit (whole) Life policy are limited in the first two or three years, depending on the issue age of the insured.

This article was contributed by Prerna Mordani.

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