Simplified issue life insurance
You’re healthy? You’re looking for a fast and easy way to get life insurance without a medical examination but at a price that takes your state of health into account? Maybe simplified issue life insurance is the answer.
What’s simplified issue life insurance?
For this article, simplified issue life insurance is coverage you can obtain quickly by answering questions about your health and without undergoing a medical examination. Because the process is largely automated, the insurer can rapidly assess your needs and propose suitable insurance coverage. Whereas you have to wait days or even weeks for traditional insurance, simplified insurance can be issued within the hour or during the next business day.
How do I go about purchasing simplified issue life insurance
You answer a medical questionnaire. Based on your answers, the insurer determines whether you qualify for the insurance and sets a price that reflects your risk profile (gender, age, smoker or non-smoker status, state of health, etc.). If the insurer determines that you don’t qualify and needs more information in order to insure you, it could suggest traditional life insurance, which requires that you undergo medical tests. If you’re not eligible for simplified issue or traditional life insurance, the insurer could propose guaranteed issue insurance, which, while more expensive, will nonetheless let you benefit from life insurance. An authorized representative can help you assess your needs and choose the right type of insurance for you.
Usually, you can get a better price if your insurer can verify that you’re in good health. It may therefore be worth your while to answer a number of questions about your health so that your insurer can make you a more attractive offer. Otherwise, you will pay the same price as people who are in poorer health than you.
For simplified issue insurance, despite there being no medical tests, the insurer may still make you a competitive offer because of your answers to the questions and the savings to the insurer resulting from the simplified insurance policyAn insurance policy, or policy, is an official document that is issued by the company and summarizes the insurance contract it has signed with one of its clients. The policy outlines the coverage provided, as well as exclusions and limitations. issue process (e.g., no meeting with a nurse or medical examinations).
Term or permanent life insurance?
There are several types of simplified issue life insurance, such as term insurance and permanent life insurance with fixed premiumsA premium, or insurance premium, is an amount that a person or company must pay on a regular basis to keep their insurance in effect. For example, if Mary has to pay $200 per year to keep her life insurance in effect, then the premium is $200.
The premium should not be confused with the face amount, or insured amount, which is the amount that the insurance company has to pay out. In the same example, if Mary has life insurance that pays $100,000 to Peter upon her death, then the face amount is $100,000. for life, that sometimes have cash surrender valuesCash surrender value is the amount the insured may receive from the insurer when he voluntarily cancels a life insurance contract before maturity. Not all insurance coverage offers a cash surrender value. or reduced paid-up insuranceReduced paid-up insurance is life insurance for which the insured no longer pays premiums but remains insured for a lower face amount. coverage.
Don’t confuse this insurance with Guaranteed issue life insurance
Before you purchase coverage, check out what type of insurance is actually being offered. Some insurers sell guaranteed issue life insurance under the name “simplified issue life insurance.” Others offer simplified issue life insurance with limited underwriting that doesn’t necessarily provide the best possible price if you’re in good health. Some insurers will let you have their best price if you’re in very good health, despite the simplified issue process. To help you determine the type of insurance that actually being offered, refer to the table below.
End of the insightA simplified issue process does not mean an online issue process
The fact that the insurance is issued quickly because of the simplified issue process doesn’t means you can purchase it entirely on-line. A number of insurers require that speak to a representative, who can help you get insurance that meets your needs.
Comparing traditional, guaranteed issue and simplified issue life insurance
| Caracteristics | Traditional life insurance | Simplified issue life insurance | Guaranteed issue life insurance |
|---|---|---|---|
| Acceptance | Must demonstrate that your state of health meets the criteria set by the insurer. If you do not meet the criteria, the insurer may offer you guaranteed issue insurance | Must answer a questionnaire to determine whether your state of health meets the criteria set by the insurer. If it doesn’t, the insurer may ask you to undergo medical tests to verify your state of health or offer you guaranteed issue life insurance. | Automatically accepted |
| Insurance amount | Virtually unlimited | Usually limited but the amounts allowed are often significant (e.g., $1,000,000) | Usually low (e.g., less than $50,000) |
| Fixed premium or premium that increases over time | Both options are available | Very often, the traditional insurance offered is term insurance. As a result, the premiums increase over time. There are some insurers, however, that offer insurance with a fixed premium. | Both options are available. Since coverage is guaranteed, the premium is high when compared with the other two types of insurance. |
| Start of coverage | A few days or weeks later. | Usually within the hour or one day later, depending on the insurer. | Usually within the hour or one day later, depending on the insurer. Attention! Although you will be get coverage fast, check to make sure the insurer will pay if death occurs during the first two years. In many cases, during that period, the insurance will pay as follows:
|
| Medical tests | Required in some cases. It depends, in particular, on the insurer and amount of insurance you’re looking for. | No | No |
| Cost of insurance | Cost based on factors such as your age, sex, smoker or non-smoker status and state of health. Guaranteed issue insurance could cost less for a healthy insured. | Cost based on factors such as your age, sex, smoker or non-smoker status and state of health. Guaranteed issue insurance could cost less for a healthy insured. | Higher than for other types of life insurance because it is available to anyone, including seniors or people in poorer health. |