Is simplified issue life insurance right for you? Find out here.

If you’re in the market for a no exam life insurance policy, you may have come across the term “simplified issue.” Simplified issue life insurance is a type of policy that allows you to obtain coverage without the need for a medical exam. While the application process does include answering several health and lifestyle questions, this type of no exam life insurance can take just a few days to be approved for, as opposed to traditional policies that take several weeks. 

Of course, if something sounds too good to be true, it probably is. While simplified issue life insurance is indeed an actual type of life insurance policy that does what it says, it’s not available to everyone. The catch of quick approval and skipping the medical exam means that most people who are approved tend to be younger than 50 in and in good medical condition. In some cases, people in so-so medical condition can still get approved, but their premiums are likely to be higher. Here you can get a free price quote for a simplified issue policy. 

The questions asked on a simplified issue life insurance application are called “knockout questions,” which means that if you answer yes to any of them, your application is knocked out of the running. These questions include whether you have a disability or if you’ve been diagnosed with a serious or fatal illness. 

Simplified issue policies can also be more expensive for someone who isn’t

When you apply for simplified issue, you also give the insurer permission to run a background check on you, which can include medical and pharmaceutical databases and DMV records. Insurers do this to verify the information you provide on your life insurance application.

The Benefits of Term Life Insurance

Simplified issue is a type of term life insurance, which means you can purchase it for a certain amount of time, or term. These policies are usually sold in increments of 5 years, so you can purchase a policy that will last for 5, 10, 15, 20 years, etc. Term life insurance is valid only for the period of the term. When it expires, you can either renew the life insurance policy (possibly with higher premiums) or let it expire. 

Whole life insurance, as opposed to term, has no expiration date. Additionally, whole life insurance policies accrue a cash value, essentially acting as an investment vehicle. Due to the nature of whole life insurance, it’s more expensive than term, which ultimately makes it a bit less popular. 

Since simplified issue is a type of term life insurance, you might expect the same application and approval process as traditional term life insurance. While there are some similarities, there are also several differences. The main idea behind any life insurance application is to give insurers an idea of how much risk they are taking on by agreeing to insure you. That’s why you need to answer health questions and lifestyle questions. 

In addition to a questionnaire, traditional term policies also require a medical exam. This gives underwriters the most up-to-date snapshot of your health, possibly uncovering conditions you didn’t even know about. 

Even though simplified issue is a type of term policy, no medical exam is required. Underwriters gather whatever information they can based on your answers and the information they collect, and then compare the information against millions of statistics. Based on these statistics, they project whether they think an applicant has a high risk of mortality or not. 

Because there is no medical exam involved in simplified issue policies, underwriters don’t have the most accurate snapshot of your health, and therefore, policies tend to be more expensive than traditional term ones.

Another difference between traditional term policies and simplified issue policies is that traditional coverage can go up to $5 million or even $10 million, but simplified issue coverage is usually capped at $500,000 or $1 million.

Pros and Cons of Simplified Issue Life Insurance

As with any type of life insurance product, there are pros and cons of simplified issue. 

Pros include:

  • Skipping the medical exam – With simplified issue, you don’t need to block off time for a medical exam
  • Quick approval – Since there is less information for underwriters to assess, approval can be granted in a few days or a week, as opposed to 6-8 weeks

Cons include:

  • Price – Can be more expensive than traditional term if you are not young and healthy
  • Limitations – Simplified issue policies often come with limited coverage and riders

Is Simplified Issue Right For You?

If you have a fear of doctors or needles, if you need life insurance quickly, or if you are young and healthy, simplified issue life insurance is a great option for you. Fortunately, there are many high-quality insurers that offer this product, so you can be selective about the policy you choose.