When it comes to the many different types of life insurance policies, simplified issue life insurance is one of the more popular forms. In this article, you will get to know about this particular life policy, its features, benefits, restrictions and if this is worth it for you.
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What is Simplified Issue Life Insurance?
This is a form of life insurance that replaces the requirement for a medical exam with answering a few questions about your medical history when making the application. This is different than Guaranteed Issue which does not require any questions or exam.
Simplified-issue life insurance means that your application is quick and you do not have to undergo any medical exam or procedure.
While it is a straightforward means of obtaining life insurance, it is also more expensive than obtaining the insurance when you do undergo a medical examination. For those who are young and healthy, a standard life insurance policy with a medical exam is arguably the better choice. However, there are some benefits for certain individuals to obtain simplified life insurance.
Policy Features of Simplified Issue Life Coverage:
In addition to general, there is also simplified issue term life insurance that is generally even less expensive than the general form.
Amount of Coverage: Depending on the insurance company, you can find amounts of coverage that reach upwards of $400,000 or more. Naturally, the more coverage or benefits that you want, the greater the premiums will be so you will need to carefully consider just how much coverage works for your needs.
With few exceptions, anyone from 18 up to 65 can get this form of coverage assuming they are in good health. Some insurance companies will cover those who are above the age of 65, but they become fewer and fewer as the age goes up.
Depending on your age and the answers provided to the medical questions, approval may be the same day. However, most approvals take a few days as the insurance company will engage in a little research. The duration of the life insurance will depend on whether you select term coverage, in which case it will end at the time it is designated to run out or if it is a general policy when you reach the age as set in the insurance company rules and regulations.
Medical Exams: The biggest advantage of having simplified issue life insurance is that you will never undergo a medical examination. There is no test, lab work or examinations performed which means that your approval rests on your age and answers to health questions.
Health Questions: Most of the health questions will be centered on having a debilitating condition or disease that may one day threaten you life. For example, if you have diabetes, are restricted to a wheelchair, have coronary artery disease or a history of heart attacks you may be disqualified from having this type of insurance.
Any other questions may revolve around your health or hobbies such as if you are a smoker or hold a job that puts you in a considerable amount of risk. Otherwise, the health questions are relatively few, but it is important that you answer them truthfully. Hiding information about your health may lead to your policy being cancelled if the insurance company discovers the illness or condition. For example, additional coverage for your spouse and children may be restricted by this type of policy as well as dismemberment which results in a permanent injury may also not be included.
Restrictions and Limitations: For those who qualify for the policy, it does have fewer riders or add-ons as compared to other types of life insurance. For example, you may not be able to add spouses or children to this particular policy nor may dismemberment be covered. However, you will need to check with your insurance company as different simplified issue life insurance companies will have different policies, riders and inclusions.
Paperwork Required: Another advantage of having simplified life insurance is that very little paperwork is required beyond the application form. There are only a few health questions which make the submission process a very simple one. In fact, the very purpose of this type of insurance was its simplicity of approval that many people enjoy. Again, if you are young and healthy, then approval can be very quick with some policies being approved almost immediately.
Cost and Expenses: This type of policy is generally more expensive than a standard health insurance policy that includes a medical exam with rates that may be two to four times greater depending on the answers to the health questions. However, it is less expensive than guaranteed issue life insurance which has no medical questions as part of the application process.
How Can I Pay for It?
You pay this type of policy just like standard health insurance which means that you can pay per month. Plus, depending on your employer you may have the payments deducted from your paycheck or have them paid automatically through your checking account.
Is There a Waiting Period?
It will depend on the answers you provide to the health questions. You may not undergo any waiting period in terms of full coverage or you may experience one that is phased in for up to five years.
Is this Policy Right for Me?
This policy is really made for the type of people who would normally qualify for a standard life insurance policy, but do not want to be hassled by undergoing a medical examination. However, the real advantage of having simplified issue life insurance is for those who may have minor health issues or are advancing in years and believe that this form of life insurance will be easier to obtain than the standard issue.
You will need to weigh the options when it comes to choosing this form of insurance as there are advantages and disadvantages. For those who are young and healthy, it is generally better to get a life insurance policy with a medical exam because the premiums will be lower. However, if you are a little older and do not have the time to undergo a medical examination, but are otherwise in good health then a simplified issue term life insurance policy may be right for your needs.