Ben Nguyen 
Life insurance provides crucial financial protection for individuals and families. However, the underwriting process of undergoing full medical examinations and providing extensive health history can be daunting. Simplified issue life insurance offers a streamlined alternative to get coverage quickly and easily.
This guide will explain everything you need to know about the simplified issue life insurance in Canada. We’ll cover what it is, how it works, who it’s best suited for, and how to get covered. Read on for expert insights to help you make the right life insurance choice.
What is Simplified Issue Life Insurance?
Simplified issue life insurance provides life insurance coverage without undergoing full medical underwriting. You’ll fill out a short health questionnaire instead of taking medical examinations. The questionnaire asks about your health history, medical conditions, and lifestyle. It typically takes 15-20 minutes to complete.
The insurance company reviews your questionnaire answers to assess your risk profile. Based on that risk assessment, they provide a rapid underwriting decision and insurance offer.
The key advantages of simplified issue life insurance are speed and convenience – you can get coverage rapidly without invasive tests. It provides an accessible option if you:
- Want to avoid medical examinations
- Have minor health conditions that could complicate qualifying for traditional life insurance
- Need coverage quickly
The simplified policy typically provides coverage amounts between $100,000 and $500,000. Premiums are higher than traditional life insurance but lower than guaranteed issue products.
What Types of Simplified Life Insurance Are Available?
Wondering what life insurance options are easier to qualify for? Here are the types of simplified life insurance available.
Simplified Issue Term Life Insurance
Simplified issue term life insurance provides temporary protection for a set period of time, such as 10, 15, 20, or 30 years. It pays a death benefit if you pass away during the term. Term policies are a cost-effective way to cover temporary needs like mortgages, child-raising expenses, or debt repayment.
Simplified term life insurance works the same way but with streamlined underwriting through the short health questionnaire. It’s easy to get term coverage this way if you have minor health issues or want to avoid medical testing.
Simplified Issue Permanent Life Insurance
Simplified issue permanent life insurance provides lifelong protection as long as you pay the premiums. It also accumulates cash value that you can borrow against or withdraw. Permanent insurance is useful for lifelong needs like final expenses or estate planning.
Simplified permanent life insurance provides permanent coverage without medical examinations. The premiums and cash values may be lower than traditional permanent policies to reflect the higher risk. However, it makes this vital coverage accessible if health issues prevent qualification.
How Does Simplified Issue Life Insurance Work?
Here is an overview of the simplified issue life insurance process:
- Complete the Health Questionnaire: This short questionnaire will ask about your health, medical history, family history, prescription medications, and lifestyle like smoking. Be sure to answer truthfully, as inaccurate responses can lead to denied claims.
- Underwriting Review: The insurer analyzes your questionnaire answers along with other data like prescription history. They use this information to assess your insurability risk profile.
- Policy Offer: Based on your assessed risk, the insurer provides a rapid quote with premiums and coverage terms for a policy that suits your needs. Simplified underwriting means much faster turnaround times than traditional policies.
- Accept Offer: Review the policy details, including premiums, coverage amount, exclusions, and waiting periods, if applicable. If satisfied, accept the offer and submit the first payment.
- Policy Issued: The insurer issues the policy quickly. You are now covered by your simplified issue life insurance policy.
Pros and Cons of Simplified Issue Life Insurance
Here are some key advantages and potential drawbacks of simplified issue life insurance to consider:
Pros
- No medical exam or health records are required
- Low health risk can still get coverage
- Extremely fast underwriting and policy issue
- Coverage amounts up to $500,000
Cons
- Premiums cost more than traditional policies
- Pre-existing conditions may not be covered
- Coverage limits around $500,000
- Potential for a policy waiting period before full coverage
How Much Does Simplified Issue Life Insurance Cost?
Premiums for simplified-issue life insurance are based primarily on the following:
- Age
- Gender
- Smoking status
- Health information from the questionnaire
Overall, simplified issue premiums are more expensive than traditional life insurance but less costly than guaranteed issue products.
Here are sample monthly premiums for the term 20 life policy:
- 35 year old female non-smoker – 1 million – 20 year life insurance – $47
- 35 year old female non-smoker, diabetes pre-condition – $500,000 – 20 year simplified term life insurance – $32
- 35 year old female non-smoker, cancer diagnosis – $300,000 – 20 year guaranteed term life insurance – $223
Premiums increase with age and are higher for male applicants. Individual premiums vary based on personal risk characteristics.
How Does Simplified Issue Life Insurance Differ From Guaranteed Issue and Traditional Policies?
Simplified issue life insurance differs from traditional and guaranteed issue products when it comes to underwriting requirements, speed, cost, and coverage limits. Here is an in-depth comparison:
| Policy Type | Underwriting Requirement | Speed | Cost | Coverage Limit |
|---|---|---|---|---|
| Traditional Life Insurance | Extensive medical underwriting, including: – Paramedical exam – Blood and urine samples – Doctor medical records Thorough assessment of health history and risk. | Slow underwriting process taking 4-6 weeks typically. | Lowest cost for very healthy applicants who qualify for preferred rates. Higher premiums for minor health conditions discovered during underwriting. | Up to $10 million or higher for some products. |
| Simplified Issue Life Insurance | Streamlined underwriting using a short health questionnaire only. Limited risk assessment based on questionnaire answers. | Very fast underwriting and policy issue | Higher premiums than traditional policies for healthy applicants but lower than guaranteed issue products. Costs vary based on limited health data from questionnaire. | Coverage amounts up to $500,000 typically. |
| Guaranteed Issue Life Insurance | No health questions or underwriting. Automatic approval regardless of health. | The approval and issue process is very fast, similar to a simplified issue. | Highest premium costs, since there is no risk assessment. | Low coverage amounts usually up to $50,000. |
As you can see, simplified issue life insurance provides a middle ground between traditional and guaranteed issue products when it comes to underwriting requirements, speed, cost, and coverage limits. It offers a streamlined alternative to medically underwritten policies at a lower cost than guaranteed issue insurance.
The tradeoff is higher premiums than traditional policies but easier qualification and faster issuance. For some applicants, that convenience is well worth the extra cost.
Who Needs Simplified Issue Life Insurance?
- Individuals with minor health conditions like asthma, anxiety, depression, or obesity. Traditional underwriting would likely rate them higher or decline.
- People who want to avoid medical examinations and testing for personal reasons. The invasive process is a barrier for some applicants.
- Young, healthy families seek protection on an accelerated basis. The simplified issue gets them covered quickly when traditional underwriting would take 4-6 weeks.
- Anyone seeking smaller coverage amounts under $500,000. The streamlined process provides an affordable option compared to guaranteed issue products.
- People requiring urgent protection, such as new parents or new homeowners. The rapid approval provides security when you need it most.
- Canadians with high-risk occupations or active lifestyles who participate in activities like scuba diving, rock climbing, or motorcycle racing could complicate traditional underwriting.
Tips for Getting Simplified Issue Life Insurance
Follow these tips to get the most suitable simplified issue life insurance policy:
- Be thorough and truthful when completing the health questionnaire. Inaccurate answers could lead to denied claims.
- Compare premiums from at least three providers. Rates can vary significantly between insurers.
- Align your coverage amount with your specific needs. Don’t overpay for unnecessarily high coverage.
- Ask about waiting periods for pre-existing conditions. Choose a policy that covers your conditions.
- For very healthy applicants, weigh the cost vs undergoing full underwriting for lower traditional premiums.
- Seek advice from an independent insurance advisor. They can explain options and recommend the right solutions.
How to Buy Simplified Issue Life Insurance
Here are the steps to purchase simplified issue life insurance:
- Research providers and get quotes from their website or an insurance advisor. Compare options.
- Fill out the health questionnaire thoroughly and truthfully to ensure accurate underwriting.
- Carefully review the terms of the policy offer, including premiums, coverage amount, exclusions, and waiting periods.
- If satisfied with the offer, complete the application and submit payment for the first premium.
- The insurer issues the policy extremely quickly.
- Review the policy documents. Follow up with any questions. Notify beneficiaries.
- Pay premiums on time to keep the policy active. Update as needed when life circumstances change.
Where to Buy Simplified Issue Life Insurance
There are two options to purchase simplified issue life insurance:
Directly from Insurance Company Websites
Many major life insurance companies like Sun Life, Canada Life, Canada Protection Plan (CPP), and RBC Insurance offer simplified issue products online. Their websites make it easy to get quotes and apply digitally.
Through Insurance Advisors
Independent advisors who have access to policies from many providers. They can explain options, recommend suitable products, and assist you through the application process. An advisor’s guidance can help identify the optimal coverage solution for your specific needs and budget.
How to Make a Simplified Issue Life Insurance Claim
If faced with the unfortunate event of needing to make a life insurance claim, follow this process:
- Contact the insurance provider as soon as possible after the death occurs. There is usually a phone number dedicated to starting claims.
- Request the claim form from the insurer. This will list the documentation and evidence required.
- Gather the necessary claim information. This often includes a death certificate, doctor’s records, beneficiary information, and proof of insurance.
- Submit the claim form and other documentation to the insurance company. Be sure to keep copies for your records.
- The insurer will review the claim and contact you for any other information needed to validate it.
- Once the claim is approved, the designated beneficiaries will receive the death benefit within 30 days typically.
- If the claim is denied, request clear reasons in writing from the insurer. Be prepared to appeal or file a complaint if warranted.
Simplified issue life insurance provides a valuable option for individuals who want an easy and fast way to secure coverage without extensive medical underwriting. While costs are higher than traditional policies, simplified issue enables access to crucial protection for those with minor health issues or an urgent need.
Frequently Asked Questions (FAQs)
Q: Who is the best provider for simplified issue life insurance in Canada?
A: Some top providers include Sun Life, RBC Insurance, Canada Life, and Canada Protection Plan. Compare options to find the best rates and coverage for your needs.
Q: What health conditions may prevent qualification for simplified issue life insurance?
A: Severe conditions like cancer, heart disease, and stroke often lead to declined coverage or higher premiums, even with simplified underwriting. Minor conditions are more likely to be accepted.
Q: Can I get a simplified issue life insurance if I have sleep apnea?
A: Yes, sleep apnea is a minor condition that typically would not preclude qualification for simplified issue coverage. The condition may need to be reflected in slightly higher premiums.
Q: Does simplified issue life insurance require a medical exam?
A: No. Simplified issue life insurance only requires completing a short health questionnaire with no medical exam or laboratory tests.
Q: Is there an age limit for simplified issue life insurance?
A: Most insurers offer simplified issue life insurance to insurance applicants between the ages of 18 and 70.
Q: How long does it take to get covered by simplified issue life insurance?
A: The approval and policy issue process takes 24-48 hours in most cases. Coverage starts immediately or after a short waiting period.
Q: Does simplified issue life insurance build cash value?
A: Simplified issue permanent life insurance builds cash value just like traditional permanent policies. Simplified issue term life insurance does not build cash value.
Q: Is the death benefit on simplified life insurance guaranteed?
A: The death benefit is guaranteed as long as you pay the premiums and is not reduced by any accumulated cash value.
Q: Can you adjust the coverage amount on a simplified issue life insurance policy?
A: Yes, most insurers allow you to apply for increased coverage in the future. This may require additional underwriting.
Q: How do I determine the right amount of simplified issue coverage I need?
A: Consider final expenses, mortgage balance, replacement income needs, and family situation. Your advisor can help determine the right amount.
Q: Is the claims payment on simplified life insurance different than traditional policies?
A: No, the claim payment process is the same. The death benefit is paid to your designated beneficiaries when the required documentation is submitted.
Q: Is there a suicide clause on simplified issue life insurance?
A: Most policies do not pay claims for death by suicide within the first 1-2 years. Afterward, the full death benefit is payable.
Q: Can I apply for simplified issue life insurance online?
A: Many major insurance companies allow you to quote, apply, and buy simplified issue coverage fully online. Independent brokers also offer online application processes.
Q: Will my minor health conditions be covered by simplified issue life insurance?
A: Most minor conditions will be reflected in somewhat higher premiums but still included in coverage. Certain severe illnesses may be excluded.
Q: Does smoking marijuana impact qualification for simplified issue life insurance?
A: Occasional marijuana use is unlikely to pose an issue. Regular use could result in the smoker's premium class and higher rates.
Q: Can I apply for simplified issue insurance from multiple insurers to compare?
A: Yes, you can complete simplified issue questionnaires from several insurers to compare premium quotes and policy terms. Each application requires your consent.
Q: How often do insurers decline applications for simplified issue life insurance?
A: Approval rates are 80-90% on average. Severe chronic illnesses and very high coverage amounts pose the most risk for insurers. Otherwise, most applicants qualify.
Q: Does simplified issue life insurance ever require a medical exam?
A: No, medical exams and fluid testing are never required. In rare cases, an exam may be requested if applying for higher coverage over $500,000.
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