Simplified Issue Life Insurance is a simple solution for applicants who might not medically qualify for traditional life insurance. It’s also a solution for applicants who need a policy issued quickly and who prefer not to undergo a medical exam.
What is Simplified Issue Life Insurance?
Simplified vs. Guaranteed Issue Life Insurance
How does Simplified Issue Life Insurance Work?
When Should You Buy Simplified Issue Life Insurance?
Simplified Issue Life Insurance is designed to accommodate individuals who need a life insurance policy issued quickly.
In most cases, the underwriting process includes minimal health questions on the application, and there is no medical exam requirement.
Most simplified issue policies have a limit on the death benefit and are restricted to individuals who are in a particular age group. Generally, the premiums are higher than traditional fully-underwritten life insurance because the company is accepting a higher risk.
Most policies are issued within a few days of the application rather than weeks or months since the underwriting guidelines are more liberal, and the underwriting process is much shorter.
If your circumstances demand that you provide life insurance quickly, simplified issue life insurance is the solution.
While simplified issue life insurance is partially medically underwritten, your risk to the insurance company is less than if you apply for guaranteed issue life insurance with no medical underwriting.
If your health issues are considered moderate, you will pay a higher rate with a simplified issue policy, and there is no waiting period or modified death benefit requirement.
If you have severe or multiple health issues and cannot medically qualify for a simplified issue plan, then a guaranteed issue policy would be the better solution. Guaranteed issue policies do not consider any medical issues, and there are typically no health questions on the application.
Since the risk is higher to the insurer, the company will require a 2-year waiting period before paying the full death benefit for deaths due to natural causes. Deaths resulting from an accident will be covered on the first day.
A simplified issue life insurance policy is generally term life insurance or whole life insurance.
It works by removing some of the underwriting processes that traditional life insurance policies have, like the insurance medical exam and requiring attending physician statements for your doctors.
Simply removing the requirement for a medical exam and doctors’ reports dramatically speeds up the process of issuing the policy. Since the insurer is accepting a higher-than-normal risk, they will have a considerable amount of health questions on the insurance application.
In addition to the insurance application, the insurer generally orders a Medical Information Bureau report as well as a Prescription Drug report. Some companies will also order a Motor Vehicle Report to verify if you’ve gotten any violations like DUI or DWI.
The insurance company will have a reduced face amount compared to traditional life insurance policies, but if your simplified issue policy is whole life insurance, you are entitled to the same features and benefits of traditional whole life insurance.
And, whether your policy is term or whole life, most insurance companies will have additional riders that you can add to customize your policy to better meet your needs,
A Simplified Issue Life Insurance policy is not for everyone. It’s designed to accommodate those individuals who prefer not to have a medical exam or need a policy issued in days rather than weeks or months.
Here are some real-life examples of when a simplified issue policy will likely be the best solution:
If you are unsure if simplified issue insurance is the best solution for your circumstances, contact an experienced insurance agent who will help you determine which type of policy will work best for you.
If you are considering simplified issue life insurance, you’ll likely want to know how much the average cost is compared to traditional life insurance.
Although your insurance rates will depend on certain underwriting aspects such as age, health, face amount, and the type of policy you prefer, you can get a clear picture of the difference in rates using the illustration below:
Age of Applicant Rates with Exam No Exam Rates
25 24.58 $26.05
30 $25.19 $26.87
35 $26.57 $28.31
40 $36.55 $39.69
45 $56.50 $60.62
50 $85.21 $102.25
55 $138.37 $167.56
60 $227.39 $291.81
Please Note: All rates listed above are rate indications and subject to further underwriting
Age of Applicant Rates with Exam No Exam Rates
25 $19.11 $20.47
30 $19.95 $20.48
35 $22.50 $23.19
40 $30.41 $32.04
45 $43.56 $45.21
50 $64.18 $69.09
55 $97.32 $113.74
60 $159.65 $187.64
Please Note: All rates listed above are rate indications and subject to further underwriting.
As with any life insurance product, there are advantages and disadvantages with each product depending on your need for life insurance in the first place. What life insurance works best for you will likely differ from others because your need for life insurance is different.
While many insurance carriers ask common health-related questions on the application, generally, the difference is in the “look-back” period.
While some carriers might ask about the last 12 months, others might ask about the previous 24 months, 36 months, or even use the term “have you ever.”
Here are the most common health questions on a simplified issue life insurance application:
These health questions were taken from the Application for Simplified Issue Term Life Insurance – Americo Life Insurance Company.
Although Simplified Issue Life Insurance is a quick and easier way to purchase life insurance, not everyone will qualify for coverage.
All insurance companies that offer simplified issue life insurance have certain questions that are considered “knock-out” questions. This simply means if you answer yes, your application will be declined.
It probably goes without saying that if you answer in the affirmative to any health question concerning a life-threatening illness, your application will be declined, and your independent agent will recommend an alternative product like guaranteed issue (guaranteed acceptance) life insurance.
Moreover, it’s important to know that not all disqualifiers are health questions. Many companies take issue with applicants who demonstrate dangerous lifestyles, occupations, or hobbies.
Over the years, the independent insurance brokers at LifeInsure have developed a list of insurance carriers that have demonstrated a willingness to support applicants who are looking for quick and easy life insurance coverage with competitive rates and outstanding customer service.
We consider the following insurance carriers to be our go-to companies for simplified issue life insurance policies.
As we mentioned early on, simplified issue life insurance is not for everybody. To find out if a simplified issue policy is right for you, you can start by using our “Get Quotes” buttons at the top or bottom of the page, or you can call a LifeInsure.com insurance professional at (866) 868-0099 and get answers to questions concerning your circumstances as well as a free and confidential quote.
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