What Is Simplified Issue Life Insurance and Who Should Buy It?

Simplified issue life insurance doesn’t require a medical exam. This makes it a good fit for people with serious health complications or those who dislike invasive medical exam procedures.

Applicants still have to answer some health questions. Simplified issue life insurance is typically more expensive than policies that require a medical exam, but it may be one of the few types of life insurance that people with serious health issues qualify for.

Unlike traditional life insurance policies, insurers often accept simplified life insurance applications more quickly since the underwriting process is relatively simple. Your application for a policy will likely be approved if you pass the health questionnaire and the insurer's requirements.

Simplified issue life insurance policies often have higher rates than traditional policies and lower coverage amounts, starting at just $2,000 and rarely exceeding $100,000.

Simplified issue life insurance makes it easier to get coverage by skipping the medical exam. Applicants fill out a health questionnaire, and if they meet the insurer’s criteria, they can get approval quickly, often within days.

While approval isn’t guaranteed, this type of insurance is often a good option for those with health issues that might make it hard to qualify for traditional life insurance or for people needing fast coverage. Here are the key features to know before choosing this policy.

Unlike guaranteed acceptance insurance, available only as whole life insurance, simplified issue life insurance comes in different forms to fit various coverage needs and budgets. The main types include:

• Simplified issue term life insurance: This offers temporary coverage for a specific period, such as 10, 20 or 30 years. Term life insurance is ideal for those seeking affordable, short-term protection. The premiums for simplified term life insurance are generally lower because the coverage is limited to the term length, and it doesn't accumulate cash value.
• Simplified issue whole life insurance: For lifelong coverage, simplified issue whole life insurance is the preferred choice. Unlike term life, whole life insurance remains in effect for the insured's entire life as long as premiums are paid, and it typically includes a cash value component that grows over time.

Both types use simplified underwriting, making the application process quicker and less invasive.

Simplified issue life insurance doesn’t require a medical exam, but applicants still need to answer health questions. These may ask if you need help with daily tasks, if you have conditions like HIV or cancer or if you have a terminal illness.

Final expense insurance policies, such as simplified issue life insurance, have higher premiums, especially considering their coverage amounts.

The health questionnaire, which is integral to the simplified underwriting process, can give the insurer a partial picture of the risk involved when insuring an applicant. However, it provides less information than a policy that requires a medical exam. Given the potential high risk of applicants, insurers protect themselves by setting higher premium rates for simplified issue life insurance.

Beyond the health questionnaire, insurers also consider several other factors when determining rates for simplified issue life insurance:

Each of these factors contributes to the overall assessment of risk that an insurer undertakes when issuing a simplified issue life insurance policy, ultimately influencing the premiums for the insured.

While seniors are the primary applicants for simplified issue life insurance policy, people of any age with serious health issues might consider it.

If you're worried about rejection from traditional life insurance, simplified issue policies can be a cheaper option than guaranteed acceptance insurance. However, it may not be the best fit for everyone. Applicants who qualify for traditional policies could find better deals with higher coverage amounts.

The main benefits of simplified issue life insurance are that it’s easy to apply, insurers typically accept applications within a few days of submission, and the application process doesn’t require a medical exam.

These features make simplified issue life insurance ideal for applicants whose health conditions may disqualify them from a traditional policy, buyers who need immediate life insurance coverage and those who want to avoid medical examinations.

Simplified issue life insurance offers a solution for those who face obstacles or have specific preferences for getting life insurance. Below are some scenarios when buying this type of policy may make sense:

• If you have serious health issues: Simplified issue life insurance may be a better fit for applicants with serious health issues. This type of life insurance doesn’t require a medical exam, but it asks applicants to fill out a short health questionnaire, making it easier to get approved.
• If you don’t like medical exams: For applicants who don’t like medical exams, simplified issue life insurance provides an alternative to traditional life insurance policies, which typically require one.
• If you want coverage for final expenses: Simplified issue life insurance usually comes with a lower death benefit of under $100,000 and can be as low as $2,000. This makes it a good fit for people who may not want more coverage but are interested in a benefit high enough to pay for final expenses like funeral costs.
• If you need coverage right away: While traditional life insurance applications can take weeks or even months to be approved, simplified issue life insurance policies are usually approved within a day or two and may even be approved immediately upon submitting the application.

Simplified issue life insurance isn't suitable for everyone. Here are some cases where other options may be better:

• If you're in good health: Those in excellent health with no major medical issues might find lower premiums with traditional policies that require a medical exam.
• If you seek higher coverage amounts: If you need a policy with a death benefit exceeding $100,000, simplified issue life insurance may not meet your financial protection goals.
• If you're cost-conscious: Medically underwritten policies often offer lower premiums than simplified-issue life insurance, making them a more cost-effective option.
• If you're young: Young adults, who typically have fewer health concerns and qualify for lower rates, might find better value in traditional life insurance policies.

Insurers can accept or reject any applicant for simplified issue life insurance. If you receive a denial on your simplified issue life insurance application and still need coverage, you can opt for a guaranteed acceptance life insurance policy.

Guaranteed acceptance life insurance accepts all applicants and doesn't require an exam or health questionnaire. Most guaranteed acceptance policies have high monthly premiums and a low death benefit. That said, they may still be an option worth considering for those unable to purchase other life insurance policies.

You can also consider the following alternative options:

• Group life insurance: Often a benefit of employment or membership in an organization, group life insurance can provide coverage without individual underwriting. This means no medical exams and, in many cases, immediate coverage. It's a convenient option, though benefits may be limited compared to individual policies.
• High-risk insurance providers: Specialized insurers focus on serving high-risk applicants due to health or lifestyle factors. These providers may offer more lenient terms and accept conditions that standard insurers typically reject, albeit often at a higher premium.
• Joint life insurance: A joint life insurance policy covers two individuals, typically partners or spouses, with a single policy providing coverage for both parties. It can be a practical solution for couples looking to streamline their life insurance. The policy typically pays out on the first death only, not both.
• Accidental death and dismemberment (AD&D) insurance: AD&D insurance offers financial benefits if an accident leads to death or causes significant injuries, such as the loss of a limb, vision or hearing. It's not comprehensive like life insurance but can be an affordable supplement or alternative for immediate, specific coverage needs.
• Short-term life insurance: Designed to fill a temporary gap in coverage, short-term life insurance policies offer a temporary solution during periods of transition — whether it's waiting for approval on a traditional policy or improving health to qualify for better rates in the future.

Consider which option fits your profile and financial needs when seeking life insurance alternatives.

Choosing the right life insurance policy can be challenging, given the variety of options available. We address some frequently asked questions about simplified issue life insurance to help clarify this option.