1. J Scott BurkePRO
    President, Newbury Inc., Evansville, Indiana
    A graded whole-Life insurance policy is intended for people in pretty bad health who can't qualify for a full benefit policy.

    If you have a graded policy for $10,000 and died during the first 12-months, it would usually pay only 30% of the death benefit or $3,000

    If you died during month 13-24 it would usually pay 70% or $7,000

    After 24-months it would pay the full $10,000

    Before you sign up for a graded benefit policy, make certain that you have a very experienced agent review your options. Many people sign up for a graded policy after one or two companies turn them down for full benefit. An experienced agent can check your health against dozens of companies and often get you approved at full benefit and a lower premium.
    Answered on April 8, 2013
  2. Peggy MacePRO
    President and Senior Agent, Outlook Life, Most of the U.S.
    Graded life insurance policies are a way for life insurance companies to be able to offer coverage to persons who would be uninsurable otherwise. But restricting the payment of the death benefit for the first 1-3 years for death due to natural causes, graded policies help life insurance companies stay viable so they can be counted on to pay the death benefit for all their clients.

    Graded policies generally pay 100% of the death benefit from day one for accidental death. For death due to illness, some pay only what you paid in plus a small % more during the first 3 years. Others pay a % of the death benefit and may only have a two year grade.
    Answered on April 28, 2013
  3. Katherine McDanielsPRO
    Owner/Insurance Broker, KM Health Insurance Services, Hazel Crest, Illinois
    Great question.  These are the questions that should be asked before signing up for a policy.  A graded policy normally will not pay out full benefits within a certain amount of time (such as 2 years) if death occurs from natural causes.  So if a person were to have a graded policy and dies within the 1st year, more than likely the beneficiary will get just the premiums that were paid in that year plus maybe another 10% or so as an example.
    Answered on May 11, 2013
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