Usually, a graded benefit life plan offers limited coverage for the first 2-3 years, after that time period, your full life insurance coverage is in effect.
This means, that if the insured person dies before owning the policy for the required time period (2-3 years depending on the policy) the amount of death benefit paid out is limited.
However, if the insured person dies after the required time period (after 2-3 years) the full death benefit is paid out, subject to any exclusions in the life insurance policy.
Life insurance plans if this type are usually purchased by people who are finding it difficult to get life insurance through other insurers.
Here's how you can learn about guaranteed acceptance life insurance that offers up to $30,000 of simplified life insurance with no exam for people age 78 and under.