Is Guaranteed Issue, Simplified Issue, or Fully Underwritten Life Insurance Best for You?
Insurance companies found that they can attract a lot more consumers by offering life insurance policies that are quick and easy to apply for. These days, many of the largest companies even offer potential clients that ability to apply online or over the phone without needing to schedule a personal appointment with a local agent.
Some of these digitally-issued policies can get issued within hours of making applications, but others might take several days. Still, the process is much quicker than it is with some fully-underwritten life insurance policies that might take four to six weeks.
Is Fast Life Insurance the Best Solution?
Is using one of these fast life insurance applications the right solution? First, it is helpful to define terms for different types of life insurance application processes:
- Guaranteed issue: These policies do not require a physical or even ask any health questions on the application. They get issued to any applicant regardless of health.
- Simplified issue: These policies are usually what is meant by life insurance with no exam, but they do ask health questions and make check answers against the MIB or similar sources. In some cases, the underwriter might ask for a physician’s statement depending upon answers to health questions and information found on other sources.
- Fully underwritten: These are policies with a more traditional application process that may involved a life insurance physical, body fluids, etc.
Possible Advantages of Fully Underwritten Life Insurance Policies
Simplified and guaranteed issue policies might be more convenient, but it is a convenience that consumers may pay for in higher insurance premiums, smaller death benefits, or an increased possibility of getting life insurance declined. Consider some reasons why your broker might suggest going ahead with an exam:
- Relatively young and healthy clients might get advised to simply get a life insurance physical because it is the ticket to getting those super-preferred rates that get advertised on TV all the time.
- Conversely, diabetics and other folks who suffer from chronic medical condition may find that getting a life insurance physical is the only way to convince an underwriter that a health issue truly is controlled.
- Additionally, the cutoff for more relaxed underwriting standards is usually fairly modest, so people who want large death benefits will probably have to get a fully underwritten policy anyway.
What are the Maximum Death Benefits You Can Get with Simplified Issue Life Insurance?
The Frugal Pig posted an article called Is No Medical Exam Life Insurance a Good Deal. If you want to enjoy the advantages of simplified issue life insurance, you will have to accept a modest policy. These are some possible ranges:
- Whole life: Maximum death benefits (face values) usually top out at between $25,000 to $35,000.
- Term life: Maximum face values from the most liberal companies are between $250,000 and $350,000.
Understanding Guaranteed Issue Term or Whole Life Insurance
With either term or whole life insurance, you usually find that guaranteed issue policies are for smaller face values. Most commonly, you can find senior or over 50 life insurance policies that do not require a medical exam. The other considerations with guaranteed issue life insurance is that premiums will be higher and they do not pay the entire death benefit upon issue.
Typically, the insured person must survive a waiting period that can last for two to three years before the policy will pay the entire death benefit. Before that time elapses, beneficiaries might be entitled to some percentage of the death benefit or getting their premiums refunded.
What’s The Best Life Insurance Application Process?
There is not one right answer for everybody. The best life insurance for you will depend upon many individual factors, and these could include your location, your health, your age, how much money you can spend on premiums, and how much coverage that you want to buy.
If you are uncertain, it might be time to speak with a good life insurance agent about your options. If you are concerned about a specific health condition getting your application declined or making coverage more expensive, and experienced agent should be able to work on your behalf to find the right solution. There are life insurance policies for almost everybody, but finding the best life insurance for a particular situation might take some expert advice and guidance.