Guaranteed Life Insurance

    If you purchased life insurance 5-10 years ago, you know the process sometimes can be long and cumbersome. With many companies taking upwards of 3 weeks to go from the application stage to being approved many people felt this was far too long to receive coverage. Fortunately, life insurance companies listened, and a simplified issue of life insurance was born. Let’s take a look at simplified issue coverage and what to look out for. 
    Not everyone who applies for life insurance needs millions of coverage. If you are looking to cover a specific debt you may only need $50,000 in coverage. If you have a little left on your mortgage you may only need $300,000 of coverage. Later on, in life, you may only want to cover the funeral cost and need another $20,000 to do so. This is where many simplified issue life insurance policies come into play.
    From the life insurance companies’ point of view, this is not a lot of coverage for a single person. Holding a $300,000 mortgage isn’t a lot of coverage especially if you are young and in good health. As opposed to putting you through the standard life insurance process, where you need to answer medical questions and do a medical before being approved, a simplified issue is just a series of questions you must answer before being approved. For most companies depending on how you answer these determine how much coverage you can purchase. For example, if you take prescription medication to help keep your cholesterol down you may only qualify for $100,000 in a simplified issue, whereas someone with no medication could qualify for $300,000. This brings us to our first point.
    Medicals are not to be feared. In some cases, you will get a better rate if you go through the standard medical process. This is why we recommend speaking to an insurance advisor who can properly guide you through your options.  
    What makes simplified issues different from medical life insurance is you are pooled in a category based on everyone else with your health status, age and smoking habits. The insurance company knows if they insure 100,000 males, age 40, and non-smokers that there is a certain risk that some of those policies will pay out. It is for this reason simplified issue is easier but not always better.
    Most people do not realize how much covid-19 impacted the life insurance industry. Pre Covid-19 many insurance companies still only accepted paper applications. Since then the market has changed and most companies offer an online application process.
    Thinking about lying on your simplified issue coverage to get a life insurance policy you wouldn’t be able to get otherwise? We’ll don’t do that. Here’s how they find out. Let’s say you take several different medications. One for blood pressure, one for cholesterol, and one for anxiety. Yet you think if you apply for simplified issue coverage and don’t disclose this information, you should be able to get the coverage, right? Not entirely, you see you might be able to get coverage but at the time of death the insurance company will pull up your medical information Bureau (MIB). This is where your doctors all their information on the visits you have. If the insurance company finds out you lied (committed fraud) they can refuse to pay out your policy. Even in the event, your beneficiary takes them to court. You won’t win. However, when you apply for medically underwritten coverage you disclose this information upfront. This is why the payouts on medically underwritten coverage are for the better.

    So How Do You Apply?

    Well as we mentioned speak to an advisor first to determine what’s the best plan for your specific situation. When applying for simplified issue coverage.

    • Get an estimate of coverage you need.
    • How long will you need this coverage?
    • Be as truthful as you can be on the application.
    For more information feel free to reach out to us for help.