What is Simplified Issue Life Insurance?

Simplified issue life insurance is a type of guaranteed life insurance that may be the best option for you to obtain life insurance if you need a policy right away. It requires no medical examination required as part of the application process, which consists of only a few health-related questions.

Keep reading to learn more about simplified issue life insurance and find out if this type of life insurance is a good fit for you. 

What is Simplified Issue Life Insurance?

Simplified issue insurance is a type of life insurance policy that can be approved with only a few health questions. This sort of insurance is primarily aimed towards customers who need life insurance immediately or who do not want to participate in a medical exam. 

How Does Simplified Issue Life Insurance Work?

A simplified issue life insurance policy is designed to offer life insurance coverage as rapidly as possible. The majority of consumers who submit an application for a simplified issue policy can expect to have insurance in force as soon as their application is accepted.

The insurance company will do a reduced risk assessment and determine a premium and death benefit based on the answers to a short health questionnaire instead of a medical examination.

Some insurance providers offer simplified issue life as a term life policy or as a permanent life policy, depending on your needs. Based on where you live, the laws of your state may or may not allow you to add coverage to your policy with an insurance rider. 

The Benefits of a Simplified Issue Life Insurance Policy

No medical exam: A short health questionnaire must be completed instead of a medical examination, allowing the insurance company to conduct a simplified risk assessment and determine a premium and death benefit.

No waiting period: Unlike other types of life insurance, insurers require no waiting period for simplified issue life insurance. Coverage begins as soon your application is accepted and a premium is set.

More coverage than guaranteed issue: Because it covers applicants who are considered moderately risky to insure, simplified issue life insurance provides greater coverage at a cheaper cost than other types of final expense insurance, such as guaranteed issue.

The Cons of a Simplified Issue Life Insurance Policy

Not as adaptable: If you choose a simplified issue plan, your rider options may be more limited than with other plans. 

Costlier than traditional life insurance: With a basic plan, the insurer performs due diligence and obtains a thorough understanding of your medical situation and history. It has a better understanding of how risky you are to insure and can deliver a more accurate price. Insurers will charge more for simplified life insurance because they have limited medical information about you. 

Coverage is limited: With a simplified issue life insurance policy, the provider has very little medical history for you and therefore will not offer you a higher limit policy.

Reasons to Purchase Simplified Issue Life Insurance

The court-mandated you purchase coverage: In the event of a divorce, the court may order that you obtain life insurance immediately with your children be named as beneficiaries.  

You need loan collateral: Simplified issue life insurance can assist you in obtaining a policy that may be accepted as collateral for a loan from a financial institution that accepts life insurance as collateral.

A term life policy expired: Simplified issue life insurance can help you find coverage quickly If your term life insurance policy has expired and you need coverage in the interim until you decide on the type of life insurance you need. 

Avoid medical exams: If you are not sure if you’d qualify for traditional life insurance, you can easily qualify for simplified issue life insurance without the hassle of a medical exam. 

How do Simplified Issue Life Insurance and Guaranteed Life Insurance Differ?

The differences between guaranteed issue life insurance and simplified issue life insurance lie in the health questions you are required to answer. With simplified issue life insurance, it is necessary for you to answer some health-related questions, but guaranteed issue life insurance does not require you to answer health questions. Simplified life insurance provides a little more coverage than guaranteed life options because of the health questions, but just a little.

Also, simple issue insurance can be approved quickly, whereas guaranteed issue insurance requires a longer waiting period. A simplified life policy can be underwritten in a few days; a guaranteed issue policy can take up to six weeks.

Who is a Candidate for Simplified Issue Life Insurance?

If you have a pre-existing medical condition and an urgent need for life insurance, simplified issue life insurance provides peace of mind in knowing your loved ones are taken care of after you are gone. You may benefit from simplified issue life insurance if you meet the following criteria:

• Your age is 45 to 85.
• You have a type of diabetes or another type of chronic illness or disease that makes traditional life insurance too expensive.
• You do not qualify for other types of life insurance.
• You don't want to have a medical exam.

Riders Available with a Simplified Issue Life Insurance Policy

If you need more coverage than what is provided with a simplified issue life insurance policy, you can add coverage with a policy rider by paying an additional premium. Here are some of the riders available with a simplified issue life insurance policy.

• Disability waiver of premium: If you become disabled and can no longer work, you can pay an additional premium to have the company waive your payments while you are disabled.
• Accelerated death benefit: If you are diagnosed with a terminal illness, the accelerated death benefit rider will allow you to access part of your death benefit to pay for medical costs.
• Long-term care rider: A long-term care rider pays for long-term care when you can no longer perform essential activities for daily living.
• Critical illness rider: Certain critical illnesses will pay out accelerated benefits while you are still alive to cover medical expenses. These illnesses include cancer, kidney failure, heart attack and stroke.
• Child insurance rider: The child insurance rider covers the expense of a child’s funeral. It covers children from only a few weeks old up to 18 year of age, or 25 for some insurers.

Compare Life Insurance

If you are in the market for no-exam life insurance, consider these providers offering simplified issue life insurance. Compare the benefits of each provider and decide on a policy that’s best for you.

Is Simplified Issue Life Insurance Right for You?

Simplified life insurance products do not require a medical exam, so if you need coverage right now, this could be the policy for you.  Coverage begins the moment your application is accepted and a premium is set. Simplified life insurance coverage will provide you with a higher maximum than what is usually offered for guaranteed issue policies.

Remember to compare coverage options to discover the best value in life insurance, and return to Benzinga regularly for additional insurance and financial advice.

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