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Navigating how to shop for life insurance can be daunting, especially when it can take weeks or even months to receive approval after a lengthy application process that includes a medical exam. However, there is a way to sidestep this frustrating process. Simplified issue life insurance is a straightforward, no-exam life insurance option that can offer coverage within minutes of the acceptance of your application. 

Let’s unpack how simplified issue life insurance works, its pros and cons and everything else you need to know to help you decide whether or not this kind of policy may be right for you. 

How does a simplified issue life insurance policy work?

Simplified issue life insurance policies may offer a term life or permanent life coverage. Term life policies provide coverage for a specific number of years. Permanent life insurance, while typically more expensive, provides coverage for your entire life and might include a cash value component that grows over time, offering long-term financial flexibility. These policies may or may not allow the addition of riders which can enhance or increase your coverage or death benefit.

The application process requires you to fill out a short health questionnaire in which your medical and lifestyle issues will be considered to determine your approval. If approved, your coverage can begin minutes after your first policy payment is made, seeing as no medical exam is required. However, you may not qualify for this type of policy if you have certain health issues or have a job or hobbies that are considered high-risk.

Who should consider this type of policy?

If you’re looking for quick coverage and you don’t have underlying health conditions or a high-risk lifestyle, simplified issue life insurance might be right for you. Qualifications for simplified issue life insurance may vary by carrier, but these policies generally have a higher death benefit for younger purchasers.

Benefits of simplified issue life insurance

Because these types of policies don’t require a medical exam, you don’t have to worry about a lengthy application process that requires you to schedule a doctor’s appointment weeks or months out, and you don’t have to worry about uncovering an underlying medical problem during your exam. You can buy your policy online without having to leave your home, and once approved your coverage may start immediately or within days.

Drawbacks of simplified issue life insurance

While simplified issue life insurance offers some advantages, there are some reasons that it may not be the right kind of coverage for you. Here are some of the reasons why you may want to seek out alternative options:

  • Simplified life insurance offers limited coverage: Because you are offering up less information about your health by forgoing a medical exam, the coverage amount tends to be maxed out at $40,000 to $50,000 by most insurers.
  • Your premium may be higher: Due to the limited information the carrier has about the state of your health, it is difficult for an insurer to evaluate the risk of issuing your policy. Higher premiums are charged to offset this risk. 
  • Limited customizations are available: Simplified issue life insurance plans may not be as likely to offer rider options.
  • It disqualifies applicants with serious health concerns: Pre-existing health conditions and high-risk occupations or hobbies can result in disqualifying you from simplified issue life insurance coverage.1

When to get simplified issue life insurance

Depending on your age, health status and other unique needs, there are some reasons why simplified issue life insurance might be the right coverage option for you. You may want to consider this kind of policy if:

  • You need to quickly satisfy a court requirement to secure life insurance
  • Your term life policy has expired and you’re considering what to do next
  • You want life insurance but do not want to undergo a medical exam
  • You want life insurance only to cover a lower amount such as funeral expenses

Simplified issue term life insurance vs. simplified issue whole life insurance

If you decide that simplified issue term life insurance is the right type of policy for you, you will have two different types of coverage you can chose from: simplified issue term life insurance and simplified issue whole life insurance. Each has different advantages and disadvantages depending on your needs. For example, simplified issue whole life insurance doesn’t expire, and coverage lasts as long as you live. However, this type of policy typically comes with higher premiums and lower coverage. Simplified issue term life insurance will cover a certain time period, such as 10, 20 or 30 years, which could result in lower premiums than a simplified issue whole life insurance policy. 

Please note that Nationwide offers only a simplified issue whole life insurance policy, and it’s available only to existing Nationwide auto or home insurance members.

Plan for your future

Now that you have a better understanding of what simplified issue life insurance is and how it works, it's time to consider whether it's the right option for you. Talk with a financial professional today to determine your protection needs and find the most suitable solution.

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[1] "Simplified Issue Life Insurance: Is It Worth It?," nerdwallet.com/article/insurance/
simplified-issue-life-insurance (Nov. 2, 2023).