What Does Graded Whole Life Insurance Mean? 
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 . 