Simplified issue life insurance is a streamlined way to get life insurance coverage without undergoing medical exams or providing detailed health information. It offers a quick and easy application process for those who need life insurance fast or struggle to qualify for traditional policies.
This guide will provide a comprehensive overview of simplified life insurance issues, including key benefits, drawbacks, eligibility, costs, and leading providers in Canada. Read on to learn everything you need about simplified issue life insurance and determine if it may be the right option for your needs.
What is simplified issue life insurance in Canada?
Simplified issue life insurance, also known as guaranteed issue or no medical life insurance, provides life insurance coverage without requiring medical exams or lengthy health questionnaires.
With traditional, fully underwritten life insurance, applicants must undergo a medical exam and provide extensive details about their health background. Insurers thoroughly analyze this information to determine eligibility and classify applicants into standard or substandard risk categories.
Simplified issue life insurance skips the medical exam and health questions. Applicants only need to answer a few basic health questions to qualify. This simplified underwriting process provides near-instant approval decisions.
The tradeoff is that simplified issue life insurance offers less coverage at higher premiums than medically underwritten policies. Insurers charge more due to increased risk from having limited health information.
How Simplified Issue Life Insurance Works in Canada
The simplified issue life insurance application process generally involves:
- Completing a short application with basic personal details
- Answering 3-5 questions about your health
- Providing contact details for your physician
- Signing release forms for medical records
The entire application takes 15-30 minutes. Once submitted, the insurance company will contact your doctor to verify your health information. You will receive near-instant approval if your answers match your medical records.
The insurance company determines your premium rate based on age, gender, smoking status, and the small amount of health information provided. Simplified issue plans cost more than traditional policies for healthy applicants but can be an option for those who cannot qualify for regular coverage.
Benefits of Simplified Issue Life Insurance
Here are some of the main advantages of simplified issue life insurance:
Speedy Application Process
The simplified application takes just 15-30 minutes to complete. It is much faster than traditional life insurance, which requires medical exam scheduling. You can obtain coverage in days rather than weeks.
No Medical Exam Required
Simplified issue life insurance does not require submitting blood and urine samples or undergoing exams by a medical professional. The hassle-free application is more convenient.
Possible Coverage for Health Conditions
Simplified issue life insurance offers possible coverage for some health issues that may make you ineligible for regular life insurance. Conditions like diabetes, high blood pressure, and high cholesterol often qualify.
Lower Coverage Amounts Available
The coverage maximum for simplified-issue life insurance is usually $500,000. Traditional policies often go up to $1 million. Simplified issue works well if you need a lower amount of coverage.
Drawbacks of Simplified Issue Life Insurance
While simplified issue life insurance offers advantages like speed and convenience, it also has some limitations to consider:
Premiums for simplified issue life insurance are 50-100% higher than comparable traditional policies. Insurers charge more due to limited health information.
Lower Coverage Maximums
Simplified issue policies max out at around $500,000 in coverage. Those needing higher coverage amounts can likely qualify for a traditional policy.
Limited Policy Options
Simplified issues are primarily available for permanent and term life insurance. Other policy types, like universal or whole life, may require full underwriting.
Two-Year Waiting Period
Most simplified issue policies have a two-year waiting period before the full death benefit pays out. Limited benefits may be available during this time.
Eligibility for Simplified Issue Life Insurance
Simplified issue life insurance has broad eligibility requirements since it does not require a medical exam. Typical eligibility guidelines include:
- Ages 18-75
- Canadian resident
- Non-smoker or occasional smoker
- No primary health conditions like cancer, heart disease, etc.
- Coverage amounts under $500,000
A simplified issue works best for older applicants over age 50 who need smaller coverage amounts. Younger applicants in good health often get lower rates with traditional policies.
How Much Does Simplified Issue Life Insurance Cost?
As a rule of thumb, expect to pay 50-100% higher premiums for simplified issue life insurance compared to regular policies.
For a $500,000 policy at age 50, simplified issue life insurance costs around $100-$150 per month. A comparable fully underwritten policy would be $50-$75 per month.
Factors impacting your premiums include:
- Age: Premiums increase as you get older.
- Gender: Women pay lower premiums than men.
- Health: Any disclosed conditions may increase your rate.
- Coverage amount: More coverage means higher premiums.
Always compare quotes from multiple providers, as costs can vary significantly. Working with an independent insurance broker can help find you the best deal.
Leading Simplified Issue Life Insurance Providers
All major insurance companies in Canada offer simplified issue life insurance products. Some top options include:
These carriers offer competitively priced simplified issue life insurance products with streamlined applications and fast approval decisions. An independent insurance broker can help compare providers and policies.
Is Simplified Issue Life Insurance Right for You?
Simplified issue life insurance provides an excellent option for those needing smaller coverage amounts quickly. It offers an easy application without medical exams.
This streamlined coverage comes at a price – expect to pay 50-100% higher premiums. Before purchasing simplified-issue life insurance, compare quotes for regular-term life insurance. You may qualify for lower rates.
Work with an experienced insurance advisor to review your specific needs and recommend whether simplified issue life insurance is your best option.
Simplified Issue Life Insurance FAQs
Here are answers to some frequently asked questions about simplified issue life insurance:
What health conditions qualify for simplified issue life insurance?
Simplified issue life insurance is possible for mild to moderate health conditions like high blood pressure, high cholesterol, diabetes, asthma, anxiety, depression, and arthritis. Severe illnesses usually require full underwriting.
How long does it take to get approved?
Many simplified issue life insurance policies provide instant approval decisions. After submitting your application, most insurers provide a decision within 24-48 hours. You can obtain coverage rapidly, often in under a week.
Can simplified issue policies be converted later?
Simplified issue life insurance plans are usually convertible to permanent policies in the future. You must undergo full medical underwriting for assessment at the time of conversion.
Is there a waiting period to get full coverage?
Most simplified issue policies have a two-year contestability period. If death occurs within the first two years, the payout is limited to the return of premiums plus interest. After two years, the full death benefit amount is payable.
Can I get simplified issue life insurance after age 75?
The maximum issue age for simplified issue life insurance is usually around 75. A few companies offer coverage up to age 85. Beyond age 75, guaranteed issue life insurance is usually the only option.
How do the costs compare to regular life insurance?
Depending on your age and health, expect to pay 50-100% higher premiums for simplified issue life insurance compared to fully underwritten policies with medical exams.
Is there a limit on how much coverage I can get?
Most simplified issue life insurance policies have maximum death benefit amounts of $100,000 to $500,000. For higher coverage amounts, traditional underwritten policies are likely required.
Working with an Experienced Insurance Advisor
Simplified issue life insurance fills an essential niche for those needing life insurance fast or having minor health conditions.
Work with an experienced independent insurance advisor to determine if it is the right solution for you. They can accurately assess your needs, review eligibility, and find you the optimal policy at the best value in Best Insurance Online – the largest branding digital newspaper on life insurance in Canada.