What Is Simplified Issue Life Insurance?

Simplified issue life insurance is a type of life insurance policy with a fast approval process and minimal health questions. No medical exam is required. These policies can be ideal for people who do not qualify for traditional coverage or need coverage quickly.

Understanding Simplified Issue Life Insurance

A simplified issue plan is life insurance you can obtain quickly by completing a short health questionnaire instead of undergoing a medical exam.

The death benefit payout of a simplified issue policy can range from $5,000 to about $100,000. Premiums are typically higher than premiums for a traditional term life or whole life policy.

Simplified issue plans differ from guaranteed issue life insurance, which promises coverage without a medical exam or health questions.

Simplified issue life insurance may be a good option if you can’t qualify for a traditional policy but aren’t in poor enough health to settle for guaranteed issue life insurance.

Guaranteed issue and simplified issue policies are sometimes referred to as final-expense insurance because the payouts are small and may cover little more than funeral and burial costs.

How Do Simple Issue Policies Work?

Bypassing a medical exam means life insurance companies can’t fully evaluate the risk of insuring you.

You pay higher premiums for simplified issue life insurance because insurers are trying to hedge against risk.

To obtain coverage, you must answer some health questions. Insurers use data modeling to determine whether to issue you a policy.

If you have certain serious medical conditions, your application can be denied.

Questions a Life Insurance Company May Ask You
  • Do you have a disability that requires a wheelchair?
  • Do you live in a nursing home?
  • Have you been diagnosed with cancer, diabetes or another serious Illness within the last two years?
  • Do you have heart disease?
  • Do you have HIV or AIDS?
  • Have you had a stroke?
  • Do you have any cognitive impairments?

Your application gives the insurance company the right to run your name through medical databases and view other records to verify your information.

Failing to answer questions truthfully is considered insurance fraud in most states.

Some simplified life insurance requires you to hold the policy for two years before it will pay the full death benefit.

If you die before this waiting period ends, your beneficiaries will be refunded the money you’ve already paid in premiums.

When to Buy Simplified Life Insurance

Simplified issue life insurance may be a good fit if your age or health makes it difficult to qualify for other policies.

It may also be a solution if you need coverage quickly.

According to Fidelity, most people who apply for a simplified issue policy can expect to have insurance as soon as the application is accepted. This gives you coverage in days — not weeks or months.

Simplified issue life insurance may be right for you if:
  • You’re older.
  • Your health prevents you from qualifying for more affordable coverage.
  • The court has ordered you to get life insurance and list your children as beneficiaries.
  • You need collateral for a loan.
  • Your term life insurance policy has ended, and you want a “placeholder” policy while you decide what to do next.
  • You don’t want to undergo a medical exam.
  • You have some other immediate need for life insurance.

Advantages and Disadvantages

Simplified issue life insurance offers convenience with a catch. You avoid taking a medical exam, but, in return, you pay more money for less coverage.

Advantages of Simplified Issue Life Insurance
  • You’re not required to have a medical exam.
  • Coverage starts as soon as your application is accepted.
  • Policies usually feature a higher death benefit than those offered with guaranteed issue life insurance.

Most experts suggest exploring all your options first. You might be able to get a better deal from a different insurer or through a group plan offered by your employer.

Make sure to consult with a licensed insurance broker who can determine whether a simplified issue life policy is right for you.

Disadvantages of Simplified Issue Life Insurance
  • Premiums can be two to four times higher than those for other life insurance policies.
  • Death benefit payouts are often smaller than the benefits from traditional policies.
  • Some policies impose a waiting period before your policy can be paid out in full.
  • You still need to answer health questions that may disqualify you from coverage.
Last Modified: October 16, 2020

6 Cited Research Articles

  1. Golden, N. (2020, May 28). Everything to Know About No-Exam Life Insurance. Retrieved from https://money.com/no-exam-life-insurance/
  2. Metz, J. (2020, May 19). The Best Options For Senior Life Insurance. Retrieved from https://www.forbes.com/advisor/life-insurance/senior/
  3. Huddleston, C. (2020, April 17). How No-Exam Life Insurance Works. Retrieved from https://www.forbes.com/advisor/life-insurance/no-exam/
  4. DaveRamsey.com. (n.d.). What to Do If You're Denied Life Insurance. Retrieved from https://www.daveramsey.com/blog/denied-life-insurance
  5. Fidelty. (n.d.). Simplified Issue Life Insurance. Retrieved from https://fidelitylife.com/learn-and-plan/learning-center/types-of-life-insurance/simplified-issue-life/
  6. LifeHappens.org. (n.d.). What happens if I’m denied life insurance? Retrieved from https://lifehappens.org/life-insurance-101/what-happens-if-im-denied-life-insurance/