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How Does Simplified Issue Life Insurance Work?


Life insurance is designed to provide financial peace of mind for you and your loved ones. Simplified issue life insurance is something you might consider if you don’t want to go through the standard medical exam that’s often required to obtain coverage. You might consider a simplified issue policy if you need to get covered fairly quickly and don’t mind the possibility of paying slightly higher premiums.

A financial advisor could help you figure out whether life insurance is a good move for you.

What Is Simplified Issue Life Insurance?

Simplified issue, sometimes referred to as no medical exam insurance, is a type of life insurance that has a shorter, more streamlined underwriting process than traditional life insurance policies. With this type of life insurance, you may be able to get coverage by submitting an application and completing a health questionnaire online. Once you’re approved, your coverage takes effect after paying your first premium.

A simplified issue life insurance policy allows you to circumvent the medical exam that goes along with most life insurance policies. Insurers use the medical exam to screen for serious conditions like diabetes or high cholesterol that can affect your risk profile.

That doesn’t mean you’re guaranteed to get approved for simplified issue coverage. There are still certain disqualifying conditions that may prevent you from qualifying for a policy. But overall, simplified issue life insurance is designed to offer a fast track to getting coverage in a shorter time period.

How Does Simplified Issue Life Insurance Work?

In one sense, simplified issue life insurance works like any other life insurance policy. You purchase coverage with a set death benefit amount and pay premiums toward the policy. When you pass away, the policy pays out a death benefit to your beneficiaries. In terms of the timing, it may be possible to get approved for coverage in a week or less.

The death benefit amount can range from $5,000 at the low end to $500,000 or more, depending on your needs and preferences. The higher the death benefit, the higher the premium will be. In addition to the death benefit amount, the answers you provide to the health questionnaire can influence what you pay in premiums.

Simplified issue can be term or permanent life insurance coverage. With a term life simplified issue policy, you’re covered for a set time period. So your policy might be in effect for 20 years. Permanent simplified issue covers you for the duration of your life as long as premiums are paid. Between the two, permanent life insurance tends to have higher premiums as you’re asking the insurance company to cover you for a longer period of time.

Depending on the policy, you may be able to add riders to expand your coverage. Just keep in mind that adding riders can increase your premiums. Also, note that unlike other permanent life insurance policies, simplified issue coverage may not build cash value over time. If you’re hoping to accumulate cash value, you might need to look at another policy option instead.

Who Is Simplified Issue Life Insurance Good For?

SmartAsset: How Does Simplified Issue Life Insurance Work?

Life insurance can protect those you love financially should something happen to you. Whether it makes sense to choose simplified issue life insurance over another type of life insurance can depend on your situation. But generally, you might consider this type of coverage if you:

  • Want or need to get life insurance in a short period of time
  • Don’t want to have to complete a medical exam to get life insurance
  • Are looking for temporary coverage while you explore other life insurance options
  • Need a life insurance policy to use as collateral for a loan
  • Don’t necessarily mind potentially paying more for coverage

That last point is important to consider. Even if you’re young and healthy, simplified issue insurance can cost more since you’re skipping out on the medical exam. The life insurance company has to assess risk based on the answers you provide in the health questionnaire versus having a medical report detailing any health issues you might have.

Since the life insurance company is assuming more risk to cover you, they can charge you more for that coverage. So it’s important to consider what’s more important: cost vs. convenience.

If you need to get covered quickly, then a higher premium is the trade-off you might make. On the other hand, you might consider shopping around for other policies that require a medical exam if you’d like to get the lowest premium rate possible.

How to Get Simplified Issue Life Insurance

There are a number of companies that offer no medical exam insurance online. If you’re interested in a simplified issue policy, the first step is researching the options.

When comparing simplified issue coverage, consider:

  • How much coverage is available
  • What death benefit amount you need
  • Whether the insurer offers term or permanent policies
  • What kind of information you’ll need to provide
  • How long the underwriting process takes

Getting life insurance quotes online from several insurers can help you narrow down which one might be best for you. In terms of what to expect from the health questionnaire, insurers typically ask about things like past surgeries, whether you’ve been diagnosed with specific conditions, any diagnostic testing you’ve completed recently and your overall lifestyle.

It’s important to be as thorough and accurate as possible in completing the questionnaire. That can prevent any issues from arising later if you pass away and your beneficiaries need to file a claim. Also, keep in mind that even though you may be able to get covered in a week or less, there may be a waiting period for the policy. Insurers can impose waiting periods in which no claims will be paid if you pass away under certain circumstances.

If you’re not able to get approved for simplified issue life insurance, you might consider guaranteed issue instead. With a guaranteed issue life insurance policy, you cannot be declined for coverage even if you have preexisting health conditions. The catch, however, is that you might pay significantly more for a policy. Talking to an insurance agent can help you decide which type of life insurance best fits your needs.

Bottom Line

SmartAsset: How Does Simplified Issue Life Insurance Work?

Simplified issue life insurance can offer an easier path to coverage, though it’s important to weigh the cost. Regardless of which type of life insurance you choose, it’s good to have a policy in place. Even a small life insurance policy can provide your loved ones with the necessary funds to cover final expenses so they’re not burdened financially in an already-difficult time.

Insurance Planning Tips

  • Consider talking to your financial advisor about whether simplified issue life insurance might be right for you. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • One of the most important questions to consider when buying life insurance is how much coverage you need. For some people, a $10,000 policy may be sufficient while others may need $1 million or more in coverage. When thinking about how much coverage is enough, consider your loved ones’ financial needs and how those needs might change if something were to happen to you. You can use an online life insurance estimator tool to calculate how much coverage might be appropriate for your situation.

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