Next to the cost factor, submitting to a medical exam is probably the biggest reason people avoid buying life insurance.
It may be the fear of all things medical – yes, “white coat syndrome” is a real thing – or the concern that a medical exam will detect a health condition you’d rather not know about.
But there may be no need to let the fear of a medical exam keep you from getting the life insurance coverage you need.
There’s a life insurance product known as simplified issue life insurance (or simplified issue term life insurance) that can enable you to get life insurance quickly, and without submitting to a medical exam.
In fact, in today’s competitive life insurance industry, there are many different varieties of life insurance policies available to meet just about any need or preference. All you need to do is ask!
In This Article:
What is Simplified Issue Life Insurance
And since no medical exam is required, the approval time of your application is much shorter. Approval typically takes place in a matter of days, rather than the 6 to 8 weeks common with full medical qualification plans.
The death benefits offered under simplified issue life insurance are lower than they are for other policies, precisely because of the limited health considerations. Just the fact that you don’t submit to a medical exam means there may be one or more health conditions that won’t be either discovered or factored into your plan.
Life insurance companies mitigate this risk in part by offering a lower death benefit. Policies can be as small as $5,000 and up to $100,000 or more. But if you’re looking for more coverage, like $500,000 or $1 million or more, you won’t get it with a simplified issue life insurance policy.
Policies can be issued either as whole life (permanent life insurance with a cash value provision) or through simplified issue term life insurance. And depending on the insurance company you obtain coverage from, you may have a choice of several optional riders you can add to your policy, which will enhance the benefits provided.
And as you might expect, another way insurance companies compensate for limited health information is by charging higher premiums. You can expect simplified issue life insurance to cost more on a per thousand basis than a comparable amount of standard level term life insurance.
What is the Purpose of Simplified Issue Life Insurance?
The most obvious purpose of simplified issue life insurance is the minimization of health as a criterion. That doesn’t mean your health profile is ignored completely.
Even though you’re not required to submit to a medical exam, the insurance company will still perform an investigation of information databases.
In today’s Internet-driven world, there’s abundant health-related information available about you. One major source is the MIB, which is a medical database that acts as something like a credit bureau with health information for the insurance industry.
It will include significant information, including hospitalizations, diagnoses, treatments and therapies, and even medications. Insurance companies can also check with your local state department of motor vehicles to evaluate your driving record and any incidences of DUI/DWI.
But since all that can be done in a matter of days, approval is much quicker with simplified issue life insurance than is with other policy types. Speed is the second major advantage of this type of life insurance.
Advantages of Simplified Issue Life Insurance
No Medical Exam
The most obvious benefit of simplified issue life insurance is the elimination of the medical exam. Some people simply don’t like submitting to them, and others may be concerned about the discovery of an unknown health condition. This is a major reason why some people avoid going to doctors in the first place. If that describes you, simplified issue life insurance may be a good choice.
Fast Approval Time
Since the policies have a faster approval time, they may also be an excellent choice if you need coverage in a hurry. For example, you might take a large loan in which the lender requires you to have life insurance as a condition of the loan. Since you can get a simplified issue life insurance policy in a matter of days, you’ll be able to comply with the requirements of the loan approval in a more timely fashion.
Still, another benefit of a simplified issue life insurance policy is as a form of temporary coverage. Since approvals are quick and death benefits are fairly limited, you may only be interested in getting coverage for a short-term, such as when you are between jobs. Because you only need the coverage for a year or two, or even a few months, you may be willing to pay the higher premiums to make sure you have life insurance coverage during your time of transition.
When All Else Failed
Finally, because of the limited health evaluation that simplified issue life insurance policies require, it may be a better choice if you have any health conditions that might prevent you from getting a traditional whole life or term policy.
Disadvantages of Simplified Issue Life Insurance
As we’ve already discussed, simplified issue life insurance costs more than policies that require full health evaluation, including a medical exam. You’ll always be better off submitting to a full health evaluation if getting a lower premium is your primary goal.
Lower Death Benefits
And once again, death benefits under a simplified issue life insurance policy are much lower than they are for those that require full medical evaluation. If you need several hundred thousand dollars in coverage – or $1 million or more – this will not be the policy type for you.
Serious Health Conditions Can Be Turned Down
Finally, the fact that simplified issue life insurance involves limited medical evaluation doesn’t mean you can’t be turned down for coverage.
In today’s environment, insurance companies typically get as much information as they need from available databases to make a determination about your insurability.
If your medical records show that you have a serious health condition, you may still be declined for coverage even though no medical exam is conducted.
I Was Declined Simplified Issue, Now What?
If medical information available from health databases reveals a major health condition, you may need to consider guaranteed issue life insurance. That’s another very specific type of life insurance designed for applicants who won’t qualify for traditional life insurance based on health factors.
The issuance of such a policy is guaranteed, as the name implies, and they’re set up as whole life policies, rather than a term. The death benefit is limited, typically to not more than $25,000, and includes a waiting period of between two and three years.
That means if you die within the waiting period, no death benefit will be paid to your beneficiaries. But despite its drawbacks, guaranteed issue life insurance will provide life insurance coverage when no other policy type is available.
Shopping For Simplified Issue Life Insurance
Many companies offer simplified issue life insurance, however, the ones that advertise rock-bottom level premiums are usually not among them.
The reason they offer such low premiums is that they target young, healthy applicants for traditional life insurance products. If you need simplified issue life insurance, it’s most likely because you have one or more health conditions that will exclude you from bargain premium life insurance providers.
Simplified issue life insurance requires special handling. Not all life insurance companies offer this coverage, and among the ones that do, the specific terms and requirements can vary substantially from one to another. Simply put, simplified issue life insurance isn’t the type of policy you’ll want to purchase on a do-it-yourself basis. There are just too many details involved in this kind of policy.
If you have health conditions that you think may interfere with your ability to get traditional life insurance coverage, you should work with a life insurance broker.
We work with all kinds of applicants, including those with health conditions, high-risk occupations and hobbies, and the need for specialized insurance policies. And because we work with dozens of life insurance companies, we know the ones that will give the most favorable consideration to whatever your specific circumstances or needs are.
And don’t worry that our services will cost more than what you would pay if you purchased coverage directly from a provider. Insurance companies compensate us for placing applicants with their policies, and we charge no direct fees to you for our services. That means we do all the work, and you pay nothing extra. Plus, you’ll save time and effort in finding the right company and the right policy for you.*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.