What is Graded Benefit Whole Life Insurance?

Whole life insurance is the best way to support your loved ones even after you die. It allows you to leave a lump sum to your family so that they can pay off your medical bills, funeral expenses, and debts.

Not to mention, the whole life insurance is also great if you want to leave some money for your children or wife so they can continue living their life peacefully. But if you are above 50 or have any severe health problem, it’s hard to find the best policy.

In this case, you can purchase graded benefit whole life insurance. Read the article further to learn more about this policy.

What is Graded Benefit Whole Life Insurance?

what is graded benefit whole life insurance

Graded benefit whole life insurance is a permanent life insurance policy, unlike a term policy that concludes at a designated time.

The primary factor that makes graded life insurance different from others is it gets graded over time, which helps to keep the premiums the same throughout the policy.

If you die in the first two years of the insurance, your beneficiaries will get the amount of interest and premium payments, but not the whole life insurance death benefit.

This means, in the first two years, beneficiaries only receive the premiums you have paid and the interest the amount has built until that point. You may be thinking that the amount will be worthless for your family.

However, you need to understand the average interest rate can be from 7% to 10%, depending on the company.

Additionally, some companies also offer you more than a 20% interest rate for the second year of the insurance policy.

This means you get a much higher interest rate than you receive from any other type of policy, which is the primary reason seniors opt for this insurance.

Advantages of Graded While Life Insurance


Here are some advantages of graded benefits whole life insurance that you need to know.

Provide Service to Seniors

Anyone who is above 50 years of age can apply for this insurance policy. Moreover, the benefits and policy of this whole life insurance remain the same for every older adult.

Great for People with Health Conditions

Unlike other policies, graded death benefit insurance is an ideal choice for people with chronic health problems.

Although anyone above 50 can apply, people with health problems can get the most benefits from this policy. You also need to know anyone with a disease that can get worse over time can also apply for this policy.

However, it is important to note that your health problem should have no immediate threat and should prevent you from purchasing life insurance after more than five years.

The following are some medical conditions that fall in this category.

  • Parkinson’s disease
  • Alzheimer’s disease
  • Incapacitation
  • Cancer
  • Coronary artery disease

No Medical Exam

Another advantage of this life insurance policy is that you don’t need any medical exam to buy it. Companies are willing to give insurance to people with serious health conditions.

Premiums Remain Same

Unlike other insurance policies, the premiums of the graded benefit insurance remain steady.

No matter how old you are or how long you have the policy, the premiums you started to pay always remain the same.

Disadvantages of Graded Whole Life Insurance


Although graded benefit whole life insurance offers many advantages, there are some disadvantages of buying this policy.

Higher Premiums

The main drawback of purchasing this whole life insurance is that premiums are usually higher than other types of policies. This is the price you have to pay for no medical examination and tests.

Lower Coverage

The amount of coverage in the graded life insurance varies depending on the company you choose.

But most insurance organizations don’t offer you coverage of more than $25,000. This amount is significantly lower than the coverage you can get from other types of whole life insurance.

Long Waiting Period

Another disadvantage of this insurance is that your beneficiary doesn’t get the full amount if you die during the first two years of the policy.

As we have already discussed, your beneficiaries will only get your paid premium and its interest.

Is There Any Waiting Period & Medical Exam?

waiting period

When it comes to medical exams, we have already mentioned, you don’t need to get any tests done.

However, if you die during a certain time, which is two years in most cases, you don’t lose your entire money. This means there is no risk. Your company will refund the premiums as well as its interest, which will be anywhere between 10% and 20%.

Additionally, every company has its own terms and policies; some organizations even give a specific percentage of the death benefit to the beneficiaries.

Despite having a waiting period, this whole life insurance is best for people who are not eligible to apply for other life insurances. This is because you don’t need to go through several procedures of a medical exam.

For seniors who know that they have a health problem that can get worse over time, this policy is a bonus. They can receive coverage that otherwise might be impossible for them.

Why Should You Buy Graded Benefit Whole Life Insurance?

There are several reasons to purchase the graded benefit whole life insurance. Here are some of them.

Provides Final Expense Planning

No matter at what stage you are in your life, you need to think and plan your life’s end. Planning for your final expenses is the best way to support your loved ones even after you die.

You can save your family and friends from the financial burden of paying for medical bills, funeral expenses, or your debts. The graded death benefit whole life insurance gives you coverage for these expenditures.

Offers Insurance to Senior Citizens

Depending on the age and health condition, some seniors might not be eligible to apply for other types of life insurance.

But the graded policy is available to seniors who are above 50. It’s an outstanding option for seniors over 80. The application process is also easy and straightforward.

Plus, some companies offer you quarterly, annual, semi-annual, or monthly payments, which you can choose according to your needs.

Offers Charitable Giving

Some people want to give their life insurance to a person, organization, or cause as a charitable gift after they die.

Hence, several companies offer you an insurance policy that you can leave for someone or something close to your heart as a gift.

This means you can choose anyone as your beneficiary who will get money directly from the company after you die.

Anyone Can Purchase It

This life insurance policy is for everyone. As discussed, anyone who is above 50 can apply for coverage.

Also, seniors who have severe health problems can also apply for the insurance policy.

For all these reasons, a graded death benefit whole life insurance is an ideal option for seniors who are struggling to find the right policy for them.

Not to mention, you don’t lose anything even if you die before the waiting period.

How to Avoid Health Questions?

When it comes to graded life insurance, it is important to understand that you don’t need to worry about your health problems.

When you contact your life insurance agent, they will help you find a company that offers insurance to people with similar health conditions.

After that, the company may ask a few questions to know the state of your disease. But it is not a big problem, as this insurance policy is for seniors with severe health conditions.

After they understand your health problems, they will give you the insurance policy.

Companies That Offer Graded Benefit Life Insurance

companies that offer graded benefit life insurance

Several companies in America offer you graded benefit whole life insurance. Make sure to choose the one that offers you maximum coverage at affordable premiums.

You can choose any of the following companies to purchase life insurance.

  • American Amicable

American Amicable is an ideal option to purchase final expenses or burial insurance. This company also offers you Golden Solution, a whole life insurance plan.

Additionally, the American Amicable allows you to choose between a graded death benefit plan and an immediate death benefit plan.

The graded benefit insurance offers you 33% of the face amount in the first year, 70% in the second year, and full coverage in the third year and onwards.

  • American National

If you choose the American National insurance company, you get more than $25,000 coverage from the third year of graded death benefit policy.

Anyone between the age of 45 and 80 can opt for their graded death benefit whole life insurance policy. In the first two years of the policy, you get the death benefit equal to the premium you paid with a 10% interest rate.

From the third year, you can get a 100% death benefit if you die in this period. The best part of this policy is that if you have purchased a policy worth more than $25,000, you will be eligible to apply for their terminal illness rider service.

  • Baltimore Life

Baltimore Life is one of the few insurance companies that offer you different burial life insurance plans.

They have Silver Guard I, II, and III insurance plans. The Silver Guard I is for the seniors who are healthy, as they have to pass the health questionnaire.

On the other hand, Silver Guard II and III are ideal for people with health conditions. In this policy, you can get the graded death benefit, which offers you 25% coverage in the first year.

You can also get 50% coverage in the second year and full in the third year and beyond.

  • Prosperity Life

This life insurance company offers you final expense life insurance. Prosperity Life offers three different insurance policies, modified, graded, and level to the people between the age of 50 and 80.

The face amount of this company is also great, which falls between $1,500 and $35,000.

Prosperity Life also offers you graded death benefit insurance for 20 years term. However, this policy has a lower death benefit in the first three years.

After this period, you can receive the complete death benefit. It is also important to note that after 20 years of the policy, the death benefit starts to decrease, but the premium remains the same.

Where to Buy the Policy?

Choosing the right insurance company can be challenging for you if you little knowledge about the terms and policies of the insurance.

Not to mention, designing the right insurance plan to cover your final expenses, debts, and medical expenses is also tricky. For this reason, you need help from a highly professional and qualified expert like (write your company’s name).

An expert with years of experience can help you determine which company can offer you a policy that is favorable for you. Don’t forget that there are hundreds of companies in different states of the US that offer great insurance coverage.

But, of course, not every policy is right for you and can fulfill our requirements and expenses. This is why we (write your company’s name) offer you free quotes so that you can opt for the best option for yourself.

Our team also helps you plan for your insurance policy and guides you throughout the insurance procedure.

So, if you are struggling to find the best-graded benefit whole life insurance for yourself, you can contact us.

Bottom Line

Graded benefit whole life insurance is a policy that offers you coverage even if you die during the waiting period; your beneficiaries get your paid premiums with interest.

You can also purchase this insurance if you have any severe diseases, such as cancer, Parkinson’s disease, and Alzheimer’s disease.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.