Applicants who might not be medically eligible for conventional life insurance can easily find a solution with simplified issue life insurance. It’s also a choice for candidates who want to avoid a medical examination yet need a policy issued right once.
Simplified Issue Life Insurance: What Is It?
Simple Problem Life insurance is made to accommodate people who require a life insurance coverage to be supplied right away.
Most of the time, the underwriting process only asks a few health-related questions on the application and doesn’t need a medical exam.
Most simplified issue policies are only available to people in a specific age range and have a cap on the death benefit. Due to the company accepting a greater risk, the rates are typically higher than those of standard fully-underwritten life insurance.
Since the underwriting criteria are more lenient and the underwriting procedure is substantially quicker, most policies are issued shortly after the application rather than weeks or months later.
Simplified issue life insurance is an option if your situation necessitates providing life insurance right away.
Guaranteed Issue vs. Simplified Issue Health Insurance
When compared to applying for guaranteed issue life insurance, which has no medical underwriting, simplified issue life insurance has a lower risk to the insurance company.
There is no waiting period or modified death benefit requirement with a simplified issue policy, but you will pay a higher rate if your health conditions are deemed moderate.
A guaranteed issue policy would be preferable if you have serious or multiple health conditions and are not medically qualified for a simplified issue plan. No medical conditions are taken into account by guaranteed issue plans, and there are normally no health-related inquiries on the application.
The insurer will demand a 2-year waiting period before paying the full death benefit for fatalities caused by natural causes because the risk is higher to the insurer. Accident-related deaths will be discussed on the first day.
What is the Process for Simplified Issue Life Insurance?
Uncomplicated problem Term life insurance or whole life insurance are the two most common types of life insurance.
It functions by doing away with parts of the underwriting procedures included in conventional life insurance plans, such as the insurance medical examination and the demand for attending physician statements from your doctors.
Simply eliminating the need for a medical exam and doctor reports would significantly speed up the policy issuance procedure. There will be a significant number of health-related questions on the insurance application because the insurer is taking on a higher-than-average level of risk.
The insurer typically requests a Medical Information Bureau report and a Prescription Drug report in addition to the insurance application. A Motor Vehicle Report may also be requested by some businesses to confirm whether you have ever received any infractions like DUI or DWI.
If your simplified issue policy is whole life insurance, you are entitled to the same features and benefits as traditional whole life insurance even though the insurance company will have a lower face amount than with standard life insurance plans.
As long as the payments are paid, your firm is unable to cancel your insurance.
After the insurance is issued, your organization is not permitted to raise your periodic premium due to your age or illness.
Over time, your insurance policy will accrue cash value that you can access through policy loans or withdrawals.
The majority of insurance firms also provide additional riders that you can add to your policy, whether it is a term or whole life one, to further tailor it to your needs.
When Should You Purchase a Life Insurance Policy with Simplified Issue?
A Simple Problem Not everyone should purchase a life insurance policy. It’s made to accommodate people who would rather not to have a medical examination or who require a policy to be given immediately as opposed to taking weeks or months.
Here are a few instances from real life where a simplified issue policy will probably be the best course of action:
- when you have to fulfill a divorce decree’s life insurance requirement.
If a lender demands life insurance as security or protection for your debt.
- when you are unsure about your ability to get approved for a conventional, fully underwritten life insurance policy.
- You desire a backup policy while contemplating whether to convert or renew a term insurance policy that is about to expire.
- You adamantly refuse to go through a life insurance medical examination.
- If you’re unclear whether simplified issue insurance is the best option for your situation, speak with a knowledgeable insurance agent who can advise you on the type of coverage that will suit your needs the most.