What is simplified issue life insurance?
A simplified issue life insurance policy is a no-medical-exam policy that is issued quickly. Instead of undergoing a full medical exam, as in traditional insurance underwriting, you answer a limited set of health questions. The insurer then uses this information, along with other available data, to decide whether to approve your application and what rate to offer.
Simplified issue life insurance is issued more quickly because there are fewer steps.
"One of the biggest advantages of simplified issue life insurance is that the insurer decides faster — sometimes in minutes, compared to several weeks for traditional underwriting. Also, the application is much shorter: A simplified issue life insurance policy will only ask you a handful of health-related questions and there is no medical exam," Seth Buckley, president at Buckley Financial, a life insurance brokerage, says.
Insurers may use prescription records, motor vehicle records and other electronic data along with your application to assess risk.
Should you buy simplified issue life insurance?
Simplified issue life insurance is a smart option if you value speed, convenience, or want to avoid a medical exam. It’s helpful if you think you’ll have difficulty qualifying for traditional coverage.
That said, it’s not always the best or cheapest option.
You might consider simplified issue life insurance if:
- You want to avoid a medical exam
- You need coverage quickly
- You prefer a shorter, simpler application process
- A health condition makes traditional underwriting more difficult
- You’re looking for a smaller death benefit, such as with final expense coverage
The application process is fairly simple and typically only involves answering a few health-related questions. However:
- Premiums for simplified issue term life insurance are much higher than those for traditional term or permanent policies because of the increased risk to the insurer of not knowing about possible medical issues
- Coverage amounts may be limited due to the lack of full underwriting
EXPERT TIP: If you're in good health, you will likely pay much less if you go through the full underwriting process for a traditional policy.
What is the average cost of simplified issue life insurance?
Rates vary, but in Insurance.com's sample data from Compulife for a 10-year, $100,000 simplified issue term life policy at age 30, rates range from $110 to $268 per year, depending on the carrier and the applicant's gender.
Life insurance rates depend on a wide variety of factors. Even without a medical exam, your health history will play a role. So does your age, lifestyle, and even your hobbies. And, of course, the amount of coverage you purchase will affect your rates.
"As a rule, simplified issue is always more expensive than fully underwritten policies. The insurance companies are taking more risk by not having all of the medical records, and charge a higher premium per thousand of protection to hopefully offset the increased risk," Kim Wilhelm, owner of Final Expense Direct, a life insurance agency in Houston, Texas.
Below, we’ve provided sample annual rates for a simplified 10-year term life policy with a $100,000 death benefit drawn from the Compulife quoting system. Rates are provided for a 30-year-old male and female, regular health category.
| Company | Product | Male | Female |
|---|---|---|---|
| Polish Roman Catholic Union of America | 10 Year Quick Issue Level Term | $136 | $110 |
| Fidelity Life Association | InstaTerm | $175 | $158 |
| National Western Life Insurance Company | Rapid Issue Life Term 10 | $205 | $180 |
| United of Omaha Life Insurance Company | Term Life Express | $214 | $182 |
| Savings Bank Mutual Life Ins Co of MA | EasyTrak Digital Term 10 | $231 | $193 |
| American-Amicable Life Ins Co of TX* | Easy Term 10 | $233 | $189 |
| Occidental Life Ins Co of North Carolina* | Easy Term 10 | $233 | $189 |
| Independent Order of Foresters | Strong Foundation | $251 | $207 |
| Fidelity Life Association | Rapid Decision Express | $268 | $194 |
*Companies are in the same group
As you increase the death benefit and the length of the term, rates will go up. Whole life will be even more costly because it lasts your entire life.
How to buy simplified-issue term life insurance
Buying simplified issue life insurance is straightforward, but it still requires careful comparison. The goal is not just to find a policy that skips the exam, but one that fits your budget and coverage needs.
To buy a simplified issue policy, follow these steps:
- Request quotes. Get several quotes to compare from multiple insurers; you can often do this online.
- Compare and choose the policy that's right for you. Look at the cost as well as the company's reputation.
- Complete the application. Many insurance companies offer online application for simplified issue life insurance. You'll have to provide some personal details and answer a few medical questions.
- Wait for your approval. This could be in minutes or a few days, depending on the company and policy details.
- Pay your premiums. If you're paying monthly, set up automatic payments so you don't forget.
Pros and cons of simplified issue life insurance
Simplified issue life insurance is popular because it skips the medical exam and speeds up approval, but that convenience comes with trade-offs like higher premiums, lower coverage limits, and possible denial based on your health answers. Understanding both helps you decide if it fits your needs.
Advantages of simplified issue life
There are several advantages to choosing a simplified issue life insurance policy.
- Convenience. The application is easy to fill out, and you don’t have to worry about a medical exam.
- Availability. These policies are available from a wide variety of insurance companies, including those that sell policies online and to a wide age range.
- Online convenience. No one comes to your home or office, and you can get a policy issued without contact.
Disadvantages of simplified issue life
- Limited offerings. These policies may not have as many options for riders as a fully underwritten policy.
- Price. The cost of simplified issue life insurance is likely to be higher, especially for young, healthy people. Without the information provided by a medical exam, insurance companies take on more risk insuring you and charge you more.
Simplified issue vs. guaranteed issue life insurance: What's the difference?
The difference between a simplified issue and a guaranteed issue is that you can't be turned down for a guaranteed issue policy. While simplified issue insurance has a much easier application process and lighter underwriting requirements, you may still be turned down based on your health history or other factors. Guaranteed issue is most common in final expense insurance, a type of whole life policy intended to provide a small death benefit for final expenses.
| Feature | Simplified issue policy | Guaranteed issue policy |
|---|---|---|
| Medical exam | No | No |
| Health questions | Yes | No |
| Underwriting | Yes, limited review of health and records | Minimal underwriting, mostly eligibility-based |
| Can be declined | Yes, based on health or risk factors | Rarely, as long as basic eligibility is met |
| Approval speed | Fast, often same day or within a few days | Fast, usually quick approval |
| Coverage amount | Higher, depending on insurer and applicant profile | Lower, typically small final expense amounts |
| Cost | Lower than guaranteed issue in most cases | Higher per dollar of coverage |
| Waiting period | Varies by policy; many provide full coverage once the policy is in force | Often 2-year graded benefit period |
| Best for | Applicants wanting faster approval and more coverage | Final expenses or those unable to qualify elsewhere |
Is simplified issue life worth it?
Simplified issue life insurance may be worth it if you want coverage quickly, prefer to skip a medical exam or have health concerns that make it likely traditional underwriting will mean higher rates or denial. The trade-off is that you may pay more or have lower coverage limits, so compare it with fully underwritten and other no-exam policies first.
"Individuals who qualify for simplified issue policies would be declined for fully underwritten policies in most cases," Wilhelm says.
For young, healthy people, a simplified issue policy is not the most cost-effective way to get coverage. "Healthy applicants will benefit from fully underwritten policies because they can qualify for the best rates," Buckley says.
Bear in mind that there will still be some health questions, so you might have to look into guaranteed issue life insurance instead if you have serious health problems.
"One disadvantage of simplified issue life insurance is that some simplified issue policies will only pay the full death benefit to your beneficiaries if you had the policy at least two years before death. If an insured person dies less than two years after getting the policy, the beneficiaries will typically get a refund of the premiums paid, with some interest," Buckley says.
If you’re willing to pay more for the convenience of a quick turnaround time and skipping the medical exam, then simplified issue is for you.
If you decide to go ahead with simplified issue life insurance, make sure you shop around. Get quotes from multiple insurers and choose the option that works for you.
FAQ: Simplified issue life insurance
Can you be denied simplified issue life insurance?
Yes, you can be denied simplified issue life insurance. There’s no medical exam, but the insurer still reviews your health answers and other underwriting information. Certain medical conditions, recent treatments or other risk factors can result in a higher premium, lower coverage amount or a declined application.
How quickly can you get simplified issue life insurance?
You may get a decision on simplified issue life insurance within minutes or a few days. The process is faster because there’s no medical exam and fewer underwriting steps. Approval time still varies by insurer, and some applications need additional review before coverage is issued.
What health questions are asked for simplified issue life insurance?
Common health questions include major medical conditions, recent hospitalizations, medications, tobacco use and ongoing treatments. Insurers may also review prescription, driving or other permitted records. Questions vary by insurer, Answer every question accurately because incorrect information can affect your coverage or a future claim.
