Non-Medical Life Insurance: Simplified Issue versus Guaranteed Issue

careful before you sign
photo by Christian Birmele

One of the small annoyances that comes with buying a traditional life insurance policy is the required medical form you must fill out, especially since some people cannot qualify for those types of plans, but still want to ensure their family's financial future. Well, don't worry because there are plans out there that require no medical exam called Simplified Issue Policies and Guaranteed Issue Policies, but there are a few subtle differences between these two distinct plans, which you should be aware of before you buy.

Simplified Issue Life Insurance Policies

These are policies available without a medical exam, but they still have a host of health-related questions. You should also keep in mind that the face amount on these policies is often limited to $150,000 of coverage because it's necessary for a life insurance company to set a maximum to cover potential losses.The chance of an insurance company receiving a claim for a life insurance policy that requires no medical exam is much greater than from a traditional policy.

Under traditional insurance plans, you complete a regular medical exam and (If you're in very good health and your family has a very good medical history) you can be approved at preferred rates or standard rates. If you are deemed to have a health risk, you will be rated (charged extra) and, in those cases where your health risk is deemed too severe to qualify for the policy, declined.

Simplified plans give you the convenience and reduced hassle of being able to get coverage in a few days, without going through a medical exam.

Most simplified issue plans are not available if the insured has been declined in the last 2 years. As a rule of thumb, the more health questions on a simplified issue application, the lower the premium.

Guaranteed Issue Life Insurance Policies

These plans provide immediate insurance with No Health Questions, No Medical Exam and No Underwriting. They are available even if you have been declined in the last two years.

Most guaranteed-issue life insurance policies are designed to provide for final expenses. The face amount is often limited to $25,000 and the death benefit is generally limited to a return (including interest) if the insured dies in the first two years of the policy. However, if they die by accident, the plan pays out immediately.

You can find more information at our Non-Medical Life Insurance Page or feel free to contact me at 1.866.899.4849

Posted by Chantal Marr.

Chantal Marr is a member of the Independent Financial Brokers of Canada.
Much of her success stems from her ability to listen to her clients' needs.
Read Chantal's background.

34 Comments

Larry 10/09/2009 at 2:16 pm

I had bypass surgery 5 years ago and am 63. What would the rate be for 50,000 coverage
LSM Insurance 10/09/2009 at 4:37 pm

Hi Larry,

Thanks for the note. I’m happy to help out and will send you an email shortly. Regards … Lorne
LF 02/08/2010 at 2:13 pm

My spouse and I have taken out policies with Manulife Non-Medical Life Insurance. Withdrawals for ….. and …. respectively were deducted this month, …. ….. We have not yet received our policies. In fact, I called your office earlier today and spoke to a gentleman who told me that the policies will be mailed this week. While I was on line, I read that these policies do not pay if either my spouse or I die within the first two years. We were not told this. Without a written policy we have had deductions without knowing all the details. Are there other details of which we should know? For example, my spouse has diabetes. Are there specific caveats attached to her? Or is the same two year caveat all that applies? In addition, I had applied sometime in the past for insurance and was turned down. It was several years ago. Would you have access to my file to ensure that I will not be paying into a policy that might be invalidated when needed. Finally, would these policies become invalid after we reach a certain age, or does coverage continue, regardless?

Thanks.
LF
LSM Insurance 02/14/2010 at 10:44 pm

Thanks for the note. You would have to contact Manulife directly for any specifc questions or concerns on your policy. We would be happy to help out with a comparison quote 1.866.899.4849
R Steel 04/02/2010 at 6:10 pm

I recently applied for (medically underwritten) insurance. I am 57 and (thought) I was in excellent health. After I had applied I received medical results from what I had thought was a minor issue suggesting that I might have a motor neuron disease, possibly even als. Needless to say this was disturbing. I decide to cancel the application because it would obviously be declined. I haven’t had the results confirmed yet but will have to sooner or later. I have some coverage and the new one would have replaced it so I decided to stay with what I had because I figured that even if somehow it went through it wouldn’t be any good because the visit had predated the application. What options do I have?

Thanks.
LSM Insurance 04/02/2010 at 7:25 pm

Thanks for the note. Not having a formal decline on your application will increase your options in terms of simplified issue life insurance plans. I will send you a separate email now.
L Spencer 04/02/2010 at 8:24 pm

I am enquiring about life insurance for my husband. He will be 70 in August of this year. He has high blood pressure (this might be a case of white-coat hypertension as his blood pressure readings on our home monitor are normal), and was just diagnosed with non-insulin-dependent diabetes last month. His cholesterol levels are within normal limits, but he has been placed on medication to keep his cholesterol at a normal level due to the diabetes. Can you please tell me if he is eligible for life insurance given his health issues? Many thanks. L Spencer
LSM Insurance 04/03/2010 at 8:06 am

Thanks for the note. He would be eligible for almost all simplified issue plans (no medical tests and depending on the plan 3 to 12 health questions).

If he has not been declined in the last 2 years for life insurance he should qualify for coverage from day one. I will send you a separate email now.
Betty 06/02/2010 at 1:11 pm

I am a 45 year old woman, non-smoker, overweight but not obese. I was diagnosed with high blood pressure which is being treated with medication.
What are the going rates for me for guaranteed coverage for $25,000, and 50,000?
LSM Insurance 06/02/2010 at 2:02 pm

Thanks for the note. You should qualify for a simplified issue plan and may even qualify for traditional life insurance. The premium will depend on the type of plan you select. We will send you a separate email now.
y.nielsen 09/02/2010 at 12:37 am

Hi – my mother is 73 and concerned she has no life insurance and whether she could get any? or whether we can for her and pay the premiums(she can not afford)? She is still working and has dibetes which is under control. She also takes a blood pressure pill. otherwise in good health. what could we get for her and what cost would there be for this? Much thanks for you help in advance!
LSM Insurance 09/02/2010 at 1:54 pm

Thanks for the note your mother should qualify for a traditional life insurance policy or a simplified issue plan.

We will send you email with more details shortly.
Imee 12/09/2010 at 1:56 am

Hello, my father is 81 yrs old and has hypertension with one maintenance medication only. He is very healthy though… What kind of life insurance can you advice for him? Please email me back. Thanks.

Imee
LSM Insurance 12/09/2010 at 10:37 am

Thanks Imee. Only a Permanent policy would be available. We work with several carriers who will insure individuals 85 and under.

We will send you an email now. Regards,
Darlene 03/12/2011 at 8:09 pm

I am enquiring about life insurance for my husband he was 73, Aug, 2010. He has high
blood pressure,with normal readings on our home monitor. He has 2 stents put in 8 years ago. Had no problems since. What kind of coverage is best.
for that? Thank you Darlene
LSM Insurance 03/13/2011 at 10:32 am

Hi Darlene,

Thanks for the note if you husband was not declined for insurance in the last 2 years he could qualify for a simplified issue policy with an immediate payout i.e. no waiting period on the death benefit.
Kendl 03/17/2011 at 1:37 am

I am a 25 year old female who smokes and weighs 330pds…could i get life/mortgage insurance for 200,000 or 150,000

LSM Insurance 03/17/2011 at 10:11 am

Thanks for the note. Some Simplified Issue policies do not have a build related question. But face amounts will be lower than the amount requested.
John 03/26/2011 at 4:00 pm

Hello

My wife has a cronic blood disorder called thalasemia major. Would she qualify for simple or non medical insurance? What amounts?

37 years old
works full time

Thank you
LSM Insurance 03/26/2011 at 8:20 pm

Thanks for the note – we would have to very a few more details to see which is the best plan for your wife – we will send you a separate email now.
Mark 04/14/2011 at 8:14 pm

My partner was diagnosed with HIV back in 2006 (he is now 32). He started ARVs in 2009, is undetectable and has a very high and very good CD4/CD8 levels. He is very healthy, in fact, he is taking better care of himself now then ever and his doctor figures he will live a normal life span with the current ARV he is taking. We have been reading a lot about European coverage of HIV infected persons but in Canada is seems delayed. Do you have any thoughts or feedback on any companies who offer a good level of coverage (i.e. over 25K for a decent price) for those living with HIV?
LSM Insurance 04/15/2011 at 11:41 am

Thanks for the note Mark. We will be in touch shortly to see if your partner qualifies for a Simplified Issue policy – if not will discuss rates on a Guaranteed issue plan. Regards,
Ricky 05/14/2011 at 4:48 pm

I am 38 year old single male and been diagonosed with HIV in Aug 2010. My immune system was normal, though i have started my medications. I am in reasonably good health without any other issues.

What life insurance options would be available for me in BC?
LSM Insurance 05/14/2011 at 6:20 pm

Hi Ricky,

Thanks for the note. You would qualify for a Guaranteed Issue Plan – The Edge, Manulife and BMO offer plans. The latter are sold direct via their call centers.

Once you diagnosis hits the 3 year mark you would qualify for some simplified issue policies.
Kimberly in Texas 06/09/2011 at 6:52 pm

We are needing life insurance for my husband. He is 42 y/o; survived a major stroke Sept 2001. He is taking blood pressure meds and cumadin. He is wheelchair dependent, but otherwise healthy. He was hospitalized for 2 months early 2010 for edema issues which are under good management now. Would he be suitable for any form of life insurance?
Thank you kindly for your time.
LSM Insurance 06/09/2011 at 8:02 pm

Thanks for the note. We are only licensed in Canada. Your husband would likely qualify for certain Simplified Issue plans in Canada but he would have to be a Canadian resident.
jsk 11/03/2011 at 2:21 am

my mom has been diagnosed with als, is she still eligable for a policy?
LSM Insurance 11/03/2011 at 8:40 am

Yes – she would eligible for a Guaranteed Issue policy and certain Simplified Issue plans. We will send you a separate email now. Regards,
Lillian 04/29/2012 at 2:04 am

Thank you so much for having info for us. I’ve spent hours and hours looking for specifics.

I converted from a group policy to an individual policy – a universal life policy – all my time with the agent was spent discussing the complicated investment options and then I signed the back page of the application.

It’s a year later and I now notice the have you ever smoked box on the front page of the application was checked off ‘no’ which is not true and I KNOW I was never asked this question. He only asked me if I smoked in the last 12 months and I said no.

When I notify either him or the company regarding this error HE made can they cancel my policy? I was told it was guaranteed issue. If they are still able to cancel my policy, would I at least get my premiums back?

To think I may have been paying these premiums for nothing is stressing me out.

Yours truly,
LSM Insurance 04/29/2012 at 8:41 am

Hi Lillian,

The insurance company may just ask for the difference in premium over the last 12 months between the smoker and non smoker rate.

If they do rescind the policy you should get a full return of premium.
Monica 01/04/2013 at 2:23 pm

Hi.
My husband and I would like to sign up for a life insurance. But he is weight is high. 350 lbs. And I am smoking and I weigh 195 lbs.
Can we still get an insurance? And what will it cover? And cost per month?
syed 01/04/2013 at 3:42 pm

Hi Monica,
Thanks for the inquiry, I have sent you a separate email. Thanks
Patti-Anne 05/09/2013 at 5:50 pm

Hi,
would like to speak to someone about simplified or guaranteed life asap.I was turned down because I had outstanding medical information and they did not want to wait to find out the results.i can send u my phone number.
LSM Insurance 05/09/2013 at 6:46 pm

Thanks for the note. We are happy to help and will be in touch soon.

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Non-Medical Life Insurance: Simplified Issue versus Guaranteed Issue

careful before you sign photo by Christian Birmele

34 Comments

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careful before you sign
photo by Christian Birmele