What Is Simplified Issue Life Insurance

Simplified issue life insurance
Simplified issue life insurance

When purchasing a life insurance policy, you might require immediate coverage, but full underwriting can take several weeks to complete. Those who require instant coverage may choose to consider simplified issue life insurance. That ease, though, comes at a price. Instead of getting a typical life insurance policy’s death benefit, you’ll frequently pay higher premiums. Let’s  find out Simplified issue life insurance in this post.

What is simplified issue life insurance?

Simplified issue life insurance
Simplified issue life insurance

The process of getting a typical life insurance policy into effect, which involves a medical test, can take four to eight weeks. A type of life insurance policy known as “simplified issue life insurance” avoids the standard underwriting procedure and enables you to get coverage right away.

You can avoid the life insurance medical examination and lab testing by purchasing simple issue life insurance. Instead, you’ll fill out a health questionnaire and submit some basic information like your age, address, occupation, height, and weight.

Through a life insurance agent or broker, you can apply in person, over the phone, or online. Usually, you’ll learn right away if your application was accepted or rejected. If authorized, your policy can usually go into effect the same day.

How does simplified issue life insurance work?

The majority of policy types, including term life, whole life, and some varieties of universal life insurance, are eligible for simplified issue underwriting. The Society of Actuaries said in 2020 that major insurers approve over 70% of applications for simplified issues.

The insurance provider will make its choice on your application for a simplified issue policy based on the details you’ve given. Carriers, however, also make use of third-party reports to assess your eligibility, including:

  • reports from MIB Group. If you have applied for individually underwritten life insurance, health insurance, disability insurance, or long-term care insurance in the previous seven years, as well as whether you have been turned down for coverage, it is recorded in your file with the MIB Group, formerly known as the Medical Information Bureau.
  • history of prescription drugs. Insurance companies analyze databases that compile information from health insurance providers, pharmacies, and medical professionals about your prescription drug history.
  • Vehicle history data. When determining whether to insure you, insurance companies will look into factors like DUIs, suspended driver’s licenses, and speeding fines.

Additionally, some businesses conduct sporadic phone interviews and internet searches to confirm facts. Additionally, it is becoming increasingly typical to incorporate data from medical billing records and criminal background checks.

If you say “yes” to a question about a medical issue, you are not automatically eliminated. Your life insurance application might, however, be submitted for additional assessment if your responses conflict with the data gathered from a third party. The insurer might demand normal underwriting, for instance, if you claim to have no family history of heart illness but your prescription history reveals you take medication for a heart problem.

Who’s eligible for simplified issue life insurance?

Simplified issue life insurance
Simplified issue life insurance

The Society for Actuaries research states that anyone up to the age of 75 can purchase simplified issue life insurance. Although age restrictions differ by insurance provider, if you’re between the ages of 16 and 55, you’ll frequently be eligible for a greater death benefit.

However, you could be turned down for simple issue insurance, unlike with assured life insurance. Your application can be declined or sent to an underwriter if you have a serious underlying health condition or indulge in risky activities.

How much coverage can you get?

Your insurer knows less about you when you apply for a simplified issue policy than it would if you underwent a complete life insurance underwriting procedure that included a medical exam. As a result, you are riskier for an insurer to insure. Therefore, compared to conventional policies, simplified issue policies typically have lesser death payouts.

While some insurers provide coverage levels of up to $500,000, a typical simplified issue term policy will provide coverage amounts of between $100,000 and $250,000. Customers over 55 are typically restricted to $100,000.

Simple issue perpetual life insurance plans often provide smaller death payments because they are intended to cover funeral and other last expenses. Maximum death payments for many simple issue whole life insurance plans range between $25,000 and $50,000.

Simplified issue life insurance pros and cons

Simplified issue life insurance
Simplified issue life insurance

Benefits of life insurance with simpler issues

  • Simple issue life insurance policies don’t need blood tests or medical exams.
  • The day after your application is accepted, coverage could start.
  • Usually, you can get greater coverage than you would with a guaranteed issue insurance.

Simple issue life insurance’s drawbacks

  • A conventional policy might be more appropriate for you if you want greater coverage at lesser costs.
  • If you have a risky employment, high-risk hobbies, or pre-existing medical issues, your application can be turned down.

Is simplified issue life insurance worth it?

If you’re in quite good health and require immediate coverage, a basic issue policy can be worthwhile. For instance, you might not want to wait a few weeks for coverage to start if you’re a new parent looking for coverage. Or, you might need your policy to go into effect right away if you’ve been mandated by a court to get life insurance as a condition of a child support arrangement.

If you require instant protection, you might be able to purchase a short-term policy while you wait for the approval of your application for standard life insurance. However, purchasing simple issue life insurance can be worthwhile if you have dependents and are unwilling to cope with the time and medical test needed for the majority of life insurance plans. This will safeguard your loved ones financially.


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