They are life insurance policies that offer death benefits which are limited (graded) the first 2 or 3 years you are insured.
Although the death benefits are limited if you die during the first 2-3 years you are insured, the premiums remain level throughout the life of your policy.
If there insured person dies during the graded benefit period, usually the insurer pays out the premiums paid, plus a rate of interest on those premiums.
However, if the insured person dies after the graded benefit period, the full death benefit is pid out to the beneficiary of the policy.
Learn more about how graded benefits life insurance plans work.