If you are actively shopping for a life insurance policy and you are over age 50, then you’ve likely read or heard the term simplified issue come up and you may be wondering what it is and what it means.
Well, it is quite simple – hence the name.
Simplified issue just means that you can qualify for a life insurance policy without having to take a physical exam.
In other words, there is no need to go anywhere to get examined and no one will need to come to you – no blood test and no or urine test. If you’ve ever purchased life insurance before or even in your current search, you’re probably aware that a physical is a normal requirement for most policies. Many people find it to be a hassle or to be intrusive.
So with a simplified issue policy you get affordable rates with less underwriting criteria.
This also means that your policy will get approved much faster and with much less hassle than usual.
Why do companies offer simplified issue policies?
There are varying reasons why a company can offer this type of policy. Keep in mind that insurance carriers offer life insurance at a particular rate based on their understanding of your life expectancy. Through many years of experience and through actuarial data, an insurance carrier has a pretty good understanding of what it needs to charge someone in order to provide coverage, and at the same time make a profit.
A company that offers simplified issue policy will know the appropriate rate to charge in order to make a profit. That is the bottom line. This goes into the tradeoff with this kind of a life insurance policy. If you obtain a policy without undergoing a complete medical examination, the rate will be higher than a fully underwritten policy.
Why does simplified issue cost more?
You have to look at it from the perspective of the insurance company. Insurance companies understand that if they make you go through a complete medical examination, then most likely they will be able to verify if you are a smoker, if you have high blood sugar, high cholesterol, and if you are overweight. This is because they are going to examine your height and weight and they will do tests on your urine and blood samples to check on these things.
Let’s face it, most seniors and elderly have some type of health concern whether it is something as minor as controlled high blood pressure or something as serious as a history of cancer and a heart attack.
Insurance companies know that not everyone will be truthful on the health questionnaire of the application.
When evaluating what rate to charge you for life insurance protection or whether or not you qualify at all, companies ask a series of health questions in order to get an overall idea of what your health condition is. Some companies ask very general questions like have you ever had a heart attack? Other companies may ask something very specific like have you had a heart attack or any type of heart condition in the last 36 months?
Now, if you fall into that category then the truthful thing to do would be to circle yes on the paper application or say yes if you are doing a phone interview.
Does everyone do this? Unfortunately, no.
People will purposely hide their health conditions and smoking status (by answering “no” to whether or not you are a smoker) in order to get a better rate. If you look at the statistics, someone who has major health issues or someone who smokes will likely die sooner than someone who is healthy.
So if an insurance company charges someone who has major health issues the same rate as a healthy person, then they will likely lose money over time.
Keep in mind that an insurance carrier will do the best investigation they can to catch these types of things. They can view prescription history as well as any electronic medical records.
So what does the insurance company do? They charge a higher rate to everyone.
For example, if you are a 75 year old man looking to purchase $50,000 worth of life insurance and you choose a simplified issue policy where you do not have to be screened by a medical exam, you will end up paying more than if you chose a $50,000 life insurance policy that required a full and complete physical examination.
Is it worth it to do this? For many seniors and elderly they say yes. Many people don’t mind paying a little bit more convenience and ease. The choice is up to you. Depending on the amount of coverage you get, the extra money you pay may be very minimal.
Be honest and have peace of mind with your coverage.
So what are seniors to do? If you think a policy without a medical exam is best for you, then make sure you are honest in your application. It doesn’t make sense to get approved for life insurance only to have the payout denied later because the company discovered that there were things that you did not disclose.
The whole point in getting life insurance is to protect your family, so don’t put them in a bad situation later.
If you obtain a policy and then die of a heart attack, cancer, or any other illness within two years, most insurance companies will do a thorough investigation on your death and the history preceding it before they pay out benefits to your beneficiaries. If the company discovers that they were misled on your insurance application, the insurance payout will be denied.
How to Get A Simplified Issue Policy in [imwb_cgt_regionName]
If you are age 50 and better, then a simplified issue life insurance policy is a good choice.
Overall I want to assist you in getting approved for the most affordable rate for your situation. I think it is important to get multiple quotes so you can compare your options. That is the beauty of the internet.
You can spend hours picking up the phone and calling company after company.
Or you can spend just as much time going to each insurance company’s individual website.
Or you can compare rates that are tailored for seniors and the elderly all in one place!
That is the why I have partnered with companies that specialize in policies for those who are over age 50. So you can compare policies that are specific to your age group and work with companies that understand the needs, the goals, and the uniqueness of the senior market.
The first step is to shop around and compare several rates from companies that specialize in coverage for those age 50 to 85. Then you can review policies and choose the one that is right for you. It really is that simple.