Graded benefit life insurance is a type of life insurance plan that provides you with a graded death benefit.
This means you do not have full life insurance coverage immediately, but you have full coverage after 2 years.
If you pass away during the first two years you are insured, the beneficiary receives a return of all premiums paid (usually) plus some level of interest on the premiums.
If you die from an accident that is covered by your policy, then the full death benefit is paid out whether it happens after two years, or during the first two years you are insured.
Once you have been insured for two full years, you have 100% full coverage for all covered causes of death including accidental death and natural causes.
Since most graded benefit life insurance plans offer guaranteed acceptance, this is how they can guarantee you are insured, by limiting the payout the first two years of your life insurance policy.
However, the above depends on your specific graded benefit life insurance policy. If you have questions, please contact your insurance agent or the life insurance company before you get insured, or while you are insured.
Here’s how you cash learn more about graded benefit life insurance policies.