Certified Financial Consultant (CFC) Practice Exam

What type of life insurance policy does not require evidence of insurability after its issuance?

1. Term life insurance

2. Whole life insurance

3. Universal life insurance

4. Guaranteed issue life insurance

The correct answer is: Guaranteed issue life insurance

Guaranteed issue life insurance is a type of policy designed to provide coverage without requiring the applicant to provide evidence of insurability, meaning that health exams or detailed health inquiries are not needed. This feature makes it accessible for individuals who may have pre-existing health conditions or other factors that would typically complicate obtaining insurance, as the goal is to guarantee acceptance regardless of health status. The design of guaranteed issue policies often comes with certain limitations, such as smaller death benefits or a waiting period before full benefits are allowed, but the absence of insurability requirements is the key feature that distinguishes it from other types of insurance. In contrast, standard term, whole, and universal life insurance policies typically require the insured to undergo health evaluations or answer health-related questionnaires before coverage is granted.