by 
The Curious Bag
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Graded whole life insurance is a type of life insurance that is often purchased by people who have an illness that prevents them from purchasing traditional types of life insurance. Usually there are premiums that do not increase but full coverage does not begin until after a period of two or three years.
Significance
Many television ads promote life insurance with premiums that do not increase and which do not inquire about the health of policyholders. These are commercials for graded whole life insurance.
Limitations
During the initial period, coverage may be nonexistent or a lower percentage of the whole amount of coverage. There is usually a requirement that a person must be at least 50 years of age to purchase this type of life insurance.
Benefits
There is no health exam, so people who would not otherwise be able to obtain life insurance are given the option to do so through graded whole life insurance.
Considerations
This type of insurance is often not a good deal for people who are healthy and could otherwise qualify for other types of life insurance.
Potential
Life insurance benefits can be used to pay for burial, to pay off debts and as income for a surviving spouse among other potential uses.
Source:
Advantage Term: Graded Benefit Whole Life: Learn Your Options:
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