Perhaps you do or maybe a family member does, but before we discuss what your needs may be, perhaps we should explain exactly what simplified issue life insurance is all about.
How Insurance Works
When you apply for any type of life insurance (other than a guaranteed issue policy) the insurance company will underwrite your application. This means that they will evaluate a number of things about you to determine if the risk is acceptable per their underwriting guidelines. Some of the things they may look at are:
- Your age.
- Your build (height and weight).
- Your tobacco use.
- Your current health.
- Your past health.
- Medications you take.
- Family medical history.
- Your exam and blood and urine tests.
- Your driving record.
- Your finances.
- Do you do extreme sports?
- Alcohol and/or drug use.
Additionally, all carriers will check databases to confirm that your application is accurate. They will check your prescriptions and the Medical Information Bureau (MIB). The MIB may have some information about previous applications and the underwriter may come back to ask additional questions if you neglected to mention something on your submission.
It may seem somewhat invasive, but they are offering to pay your beneficiary(s) a large lump of cash and they are in business to make money. You will be approved at the best rating category that they can offer based on the guidelines they must follow.
This is the basic way insurance goes. You apply and complete the requirements for the specific policy. Then the insurance company underwriters review and hopefully approve at the price you were quoted.
What's Different About Simplified Issue Insurance?
When applying for simplified issue life insurance the underwriting is, well, much simpler!
To qualify for a policy you have to be able to answer a number of questions regarding health conditions in the negative. There is no blood or urine testing required.The insurance carriers will still check the same databases to be sure that you are answering truthfully.
Simplified Issue Term Life Insurance
Simplified issue term products are not offered by many companies. As you would expect, the price is more expensive than fully underwritten term insurance. However, policies can be put in place very quickly and this alone may induce someone to be willing to pay a little more.
There may be other reasons why someone is willing to pay the extra price, such as being afraid to take the blood test. If that's the case, then this is the perfect option.
Final Expense Insurance
This is where simplified issue underwriting is at its best. When someone is looking for final expense insurance, often somewhere between $2,000 and $40,000 of coverage, simplicity is the name of the game. We find people are often helping their parents, or other older family members get coverage and everyone wants the process to be as easy as possible.Final expense life insurance is simplified issue whole life. It lasts as long as the insured lasts! Of course if you are looking for insurance to cover a funeral and final bills and debts you want a policy that will last the insured's lifetime.
The health questions vary slightly between simplified issue life insurance companies so you may find that you qualify for coverage with one carrier, but not another. You should work with an independent agent who has access to many companies and specializes in senior citizens. You will find they can help you get the best deal.
The Bottom Line
Simplified issue products are easier to qualify for than fully underwritten coverage. If you or your family member is looking for final expense coverage, these policies can make your purchase a breeze.