What is a Simplified Issue Life Insurance Policy?

June 1, 2018

If you are worried about the medical exam that is required for a life insurance policy, you could be a good candidate for a Simplified Issue Life Insurance plan. Traditional life insurance requires you to undergo some type of medical exam – the exact type depends on the insurance company’s requirements.

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With the Simplified Issue policy, you answer some questions for the insurance company. If your answers are along the lines of what their underwriting department requires, you can secure life insurance without a medical exam.

The Questions on Simplified Issue Life Insurance Applications

So what types of questions will you need to answer for a Simplified Life Insurance policy?

The exact questions may differ by provider but will have something to do with each of the following:

  • Details about your medical history (a history of chronicillness)
  • Details about any recent hospitalizations
  • Your basic height and weight information
  • Your lifestyle habits (do you smoke or drink alcohol)

These are the questions the insurance might ask; of course they could ask more or less than what is here. They may also pull your other available information that pertains to your prescription drug history or driving record. They may even go as far as pulling your applications from any previous life insurance companies.

What’s the Benefit of Simplified Life Insurance?

The basic benefit of Simplified Life Insurance is the lack of need for a medical exam. Without this need, underwriting often goes quicker, which means you get coverage faster. A majority of people that secure this type of insurance are those that are court ordered to have life insurance and are unsure about how a physical would turn out for them. This type of insurance could reduce the risk of being turned down for insurance, but by no means is it a guarantee of coverage.

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The Types of Insurance

You can secure both a term and whole life insurance policy with the Simplified Life policy. Either policy will require higher premiums in most cases. In fact, it can sometimes be as much as four times the premium for Simplified Life versus standard life insurance.

Term life insurance provides you with insurance for a term. Once the insurance expires, it has no value. You do not receive a refund of the premiums that you paid. You may have the option to renew the policy, but that varies by provider.

Whole life insurance doesn’t have a specific term. As the name suggests, it protects you for your entire life. It may include a term policy in it, but you’ll also have a portion of your funds invested for you, providing you with cash flow when you enter your retirement years. You can withdraw the funds as you see fit, helping to supplement your income when you need it.

The Simplified Life Insurance Policy is not a guarantee of coverage by any means. Just like standard life insurance, a company can turn you down based on the information you provide. Of course, you must be honest on your application and answer all questions to the best of your knowledge. The insurance company will then determine if you are a good risk and then assign a premium based on your risk.

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