Simplified Issue life insurance is a type of insurance that does not require a medical exam but does require you to answer a few questions related to your health and lifestyle. Applying and getting approved for Simplified Issue life insurance is fast and easy, but unlike Guaranteed life insurance, not every applicant will be approved.
If a medical exam prevents you from applying for life insurance, then Simplified Issue life insurance may be for you. Read on to learn more about Simplified Issue life insurance and how it can benefit you.
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The Difference Between Simplified Issue and Guaranteed Life Insurance
There are no medical exams for Simplified Issue and Guaranteed life insurance. However, there are a few differences between them.
Guaranteed Life Insurance is geared toward people in poor health who want life insurance to pay for final expenses. It requires no medical questionnaire or exam, and applicants are guaranteed approval regardless of their health or history. Since there is no way for insurance providers to gauge an applicant’s risk, Guaranteed life insurance premiums tend to cost more than other types of life insurance, including Simplified Issue life insurance. The coverage amounts also tend to be lower – CPP caps Guaranteed life insurance coverage at $50,000.
Simplified Issue life insurance is geared more toward people who may have a health issue or may not want to undergo a medical examination. It still involves an application process in which applicants will be asked questions about their health, family medical history, and lifestyle. While applicants are not guaranteed approval, they are more likely to be approved since the application asks fewer questions than fully underwritten policy applications.
Benefits of Simplified Issue Life Insurance
Simplified Issue life insurance is a convenient way to purchase life insurance for those who may not have the best health or do not like doctors. Here are a few advantages of Simplified Issue life insurance:
Shorter application
A traditional life insurance application can take a very long time to fill out, and there is still a medical examination. A Simplified Issue life insurance application asks fewer health-related questions, meaning it takes significantly less time to complete.
Lower premiums than other no-medical insurance options
Since the application for Simplified Issue life insurance still asks a handful of health-related questions, there is less risk for the insurance company to approve an applicant than other no-medical insurance options. With lower risk comes lower premiums.
More coverage than other no-medical insurance options
Simplified Issue life insurance policies can provide more coverage and higher death benefits than other no-medical insurance because the risk is lower. A Guaranteed life insurance policy with CPP covers up to $50,000, while a Simplified Issue life insurance policy with CPP can cover up to $500,000.
Guaranteed life insurance can be enough to cover your needs. However, Simplified Issue life insurance is often a better option if your health is relatively good since it has lower premiums and can provide a more considerable death benefit for your beneficiaries.
Drawbacks of Simplified Issue Life Insurance
Simplified Issue Life Insurance is a convenient way to get life insurance compared to a traditional life insurance policy. However, there are a few disadvantages of Simplified Issue life insurance:
Higher premiums than traditional life insurance options
Full medical underwriting allows life insurance companies to group applicants into classes according to their health risks. Healthy applicants get the lowest rates, while those with minor health issues get slightly higher rates. Because Simplified Issue life insurance requires less information from applicants, it is difficult to determine each applicant’s risk, so premiums tend to be higher regardless of the applicant’s health.
Graded death benefit
Some Simplified Issue life insurance policies will only pay the death benefit to your beneficiaries if you have had the policy for at least two years before passing away. If the insured person passes away less than two years after purchasing their life insurance policy, the beneficiaries may still receive a refund of the premiums paid with some interest.
Limited coverage
Because insurance providers have little information about applicants, they will not sell Simplified Issue life insurance in exorbitant amounts. A Simplified Issue life insurance policy with CPP covers up to $500,000, while a traditional life insurance policy can cover up to $1,000,000.
Simplified Issue life insurance is often a good option for applicants who have some health issues or are otherwise hard to insure. However, traditional life insurance may be a better option if you are young and in good health since it has lower premiums and can provide a more considerable death benefit for your beneficiaries.
Simplified Life Insurance Costs
Premium costs for Simplified Issue life insurance in Canada are more expensive than traditional life insurance plans because insurance companies have less information about an applicant’s health and lifestyle. As a result, it is more difficult for them to assess the risk involved with insuring them. Insurance providers compensate for the lack of information and increased risk by charging slightly higher rates.
The exact cost of a Simplified Issue life insurance policy varies between applicants. It depends mainly on a person’s age and personal health, as outlined in the medical questionnaire, though family medical history is also a factor. Applicants who are young and relatively healthy will receive better rates than applicants who are older and in poor health. Other factors include their sex, lifestyle, occupation, and driving record.
How to Apply for Simplified Issue Life Insurance
Applying for life insurance should be easy. To apply for Simplified Issue life insurance, go online to request a quote, and an advisor will contact you on the phone number provided to discuss the details of your quote. If you are satisfied with the premium, you can set up your Simplified Issue life insurance over the phone.
Simplified Issue life insurance provides an easy, viable option for applicants that may not want to undergo a complete medical examination or may be challenging to insure. Before you opt for Simplified Issue life insurance, look at other options to see if another option might be more suitable. Contact Canada Protection Plan to learn more about Simplified Issue Life Insurance today!
421639 CAN (03/23)
