Guaranteed Issue Life Insurance Or Medically Underwritten?

More and more Canadians every month purchase Guaranteed Life Insurance. With the recent surge in companies offering guaranteed life insurance policies, it’s clear that it now has a substantial place in the market but is it the right fit for you?

The easiest option isn’t always the best option. And unfortunately, we see that when comparing guaranteed issue life insurance policies vs medically underwritten policies. Let’s compare both in an easy to understand way.

Guaranteed Issue Life Insurance:

• No medical test required to purchase overage
• Coverage normally can be applied over the phone
• Depending on the amount of coverage you apply for there might be some medical question you must answer in the application
• Short approval times
• Guaranteed not to be turned down

Medically Underwritten Life Insurance:

• A medical test is needed (salvia kit test, urine test, or blood work are most common)
• Coverage can be applied for over the phone or paper application
• More coverage available compared to guaranteed issue
• Longer application times where it may take weeks or months in some cases to be approved
• Higher risk you might be turned down

After reading those two comparisons which would you choose? 

Well, if you are like most Canadians they naturally would gravitate toward the guaranteed issue. As advisors, we understand that it is more attractive. But what’s the catch?

Guaranteed issue is MORE EXPENSIVE FOR THE SAME COVERAGE.

Coverage on average is 20% cheaper if you go with medically underwritten coverage. Meaning, if you are in good health, you should always consider medically underwritten coverage first as it is the more affordable option.

The guaranteed issue will be a better option for people who have recently been declined or are on several types of medication that may make it more difficult to get traditionally medically underwritten coverage.

The simple truth as it stands is there is a place for both and it’s always dependant on your own situation. However, you will not get the most affordable plans AND the easiest application process, it will be one or the other.