Everything You Need to Know About a Simplified Issue Life Insurance Policy

There are many forms of life insurance coverage available to Canadians. From term life to permanent coverage options, there is a range of choices on the market. Different plans have different application and eligibility requirements, which can lead to a range of coverage amounts. There are typically two primary forms of life insurance, traditional plans and no medical plans. In this article, we’re taking a look at a form of no medical life insurance and answering the question, “what is a simplified issue life insurance policy?”

What is a simplified issue life insurance policy?

Simplified issue life insurance is a form of no medical life insurance coverage. Being a form of no medical coverage, you don't undergo a medical exam at the time of application. Typically, when you apply for a simplified issue plan, you only need to answer a few basic health questions.

What can you use a simplified issue insurance plan for?

Like most life insurance plans, simplified issue policies directly pay a tax-free monetary benefit to the insured’s selected beneficiaries. As a result, your beneficiaries can use this benefit in any way they choose, including:

• Paying for the insured’s final expenses like funeral costs and other end-of-life debts.
• Covering daily living costs like food, bills, and taxes.
• Paying down mortgages and lines of credit.
• Helping to keep a family business afloat during a difficult time. 

How does simplified issue life insurance work?

Due to their lack of a required medical exam, the application process for a simplified issue plan can be quite quick. Compared to traditional life insurance plans, most simplified issue life insurance policies can provide coverage in hours or days. 

In place of the medical exam, there is a simple health questionnaire consisting of health questions that cover your current and past medical issues. After completing this questionnaire, the life insurance company can determine your eligibility for different levels of coverage. In other words, depending on the answers to the questions and your age, you can qualify for specific coverage amounts. 

Simplified issue life insurance policies can come in both term and permanent life insurance plans. But depending on the insurance company you choose, you may also be able to add additional coverage riders to your plan.

What can I expect from the health questionnaire?

Applications differ from insurer to insurer and that includes the health questionnaire. The number of questions and the types of questions asked can vary greatly, but here are some of the most common:

• Are you currently in hospital, psychiatric, or assisted care?
• Have you in the last year been advised by your doctor to have diagnostic tests or surgeries that haven’t been completed yet?
• Have you been diagnosed with cancer in the last two years?
• Are you currently receiving at-home care? Do you need assistance with everyday activities like bathing, dressing, feeding or taking medication?
• Have you been diagnosed with Alzheimer’s or dementia?
• Do you have Chronic Obstructive Pulmonary Disease (COPD)?

Who should purchase a simplified issue life insurance policy?

With no medical exam requirements and a simple application process, simplified issue life insurance is ideal for people looking for quick financial security. Below you’ll find some everyday situations where a simplified issue life insurance plan can be beneficial:

• If you have medical issues.
• Your family has an extensive history of certain medical conditions or illnesses. A history of a disease can affect your premiums or possibly even bar you from getting a particular plan. With a no medical life insurance policy, your family’s medical history won’t get in the way.
• If you are afraid or uncomfortable with getting a medical exam.
• If you simply just don’t want to go through the hassle of a medical exam.
• You want an effective and accessible life insurance policy fast without lengthy waiting times or applications.

Advantages of simplified issue life insurance

• Quick issue coverage. Without a traditional underwriting or application process, simplified issue plans allow Canadians to get insured faster than traditional policies.
• Never undergo a medical exam. When applying for coverage with a simplified issue policy, you entirely skip the medical exam requirement. In place of the medical exam is a basic health questionnaire that you need to complete to qualify.
• Do you have a dangerous job or hobby? Having a dangerous job or extreme sports hobby can work against you when applying for traditional plans. You could be denied because of the risk you present to insurance companies.  In short, with simplified issue plans, your occupation or hobby typically has no impact on your eligibility.
• You can qualify even if you have poor health. If you currently suffer from an illness or injury, a simplified issue plan makes it easier to get covered. Compared to a traditional plan, simplified issue coverage gives Canadians with health issues a greater chance at qualifying for a plan.

Disadvantages of simplified issue life insurance

• Limited coverage amounts. With a more straightforward application process and more lenient eligibility requirements, most simplified issue life insurance plans provide limited coverage amounts. As a result, those looking for more than $500,000 in coverage may not benefit from a simplified issue plan.
• Higher premiums. Without the need to undergo medical exams, you present a higher risk for insurance companies. Consequently, to balance this increased risk, insurers often charge more for coverage.
• Fewer options. Unlike traditional life insurance plans, there may be fewer coverage options available on the market. 

Simplified issue term life insurance

To summarize, simplified issue life insurance policies make getting insured easy. For instance. there are no long applications to undergo and most plans cover people in as little as a few hours. 

At Termlite, we’re specialists in simplified term life insurance. Our coverage requires no medical exams, no 100-page questionnaire, and no face-to-face meetings with agents. Through our simplified application process, you can apply for your coverage without ever having to leave the comfort of your home. 

No matter your current health, we can find a plan that will suit your needs and fit within your desired budget. Get started now by completing our short free quote form.

Written by: Adam Bianco