What is a Simplified Issue Life Insurance and How does It Work?

When it comes to the many different life insurance policies, simplified issue life insurance is one of the more popular forms. In this article, you will learn about this particular life policy, its features, benefits, restrictions, and if this is worth it.

What is Simplified Issue Life Insurance?

This form of life insurance replaces the requirement for a medical exam by answering a few questions about your medical history when making the application. This differs from the Guaranteed Issue, which does not require questions or exams.

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 getting insurance when you undergo a medical examination. A standard life insurance policy with a medical exam is arguably better for young and healthy people. However, there are some benefits for certain individuals to obtaining simplified life insurance.

Policy Features of Simplified Issue Life Coverage:

In addition to the 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 you want, the greater the premiums will be, so you must carefully consider how much coverage works for your needs.

With few exceptions, anyone from 18 to 65 can get this form of coverage, assuming they are in good health. Some insurance companies will cover those above the age of 65, but they become fewer and fewer as the age increases.

Depending on your age and the answers provided to the medical questions, approval may be on the same day. However, most approvals take a few days as the insurance company will conduct 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 most significant advantage of having simplified issue life insurance is that you will never undergo a medical examination. No tests, lab work, or examinations are performed, so 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 your life. For example, if you have diabetes, are restricted to a wheelchair, have coronary artery disease, or have 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 at considerable risk. Otherwise, the health questions are relatively few, but you must answer them truthfully. Hiding information about your health may lead to your policy being canceled if the insurance company discovers the illness or condition.

For example, this policy may restrict additional coverage for your spouse and children, and dismemberment, which results in a permanent injury, may also not be included.

Restrictions and Limitations: For those who qualify for the policy, it has fewer riders or add-ons than other types of life insurance. For example, you may not be able to add spouses or children to this policy, nor may dismemberment be covered. However, you must check with your insurance company as different simplified issue life insurance companies will have other 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 that make the submission process a very simple one. The very purpose of this type of insurance was its simplicity of approval which many people enjoy.

Again, if you are young and healthy, approval can be rapid, 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 with 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 you can pay per month. Depending on your employer, you may deduct the payments 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 for full coverage or 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 choosing this form of insurance, as there are advantages and disadvantages. For young and healthy people, getting a life insurance policy with a medical exam is generally better because the premiums will be lower.

However, suppose you are a little older and do not have the time to undergo a medical examination but are otherwise in good health. In that case, a simplified term life insurance policy may suit your needs.