Life Insurance

How does instant life insurance work?

Oct 6, 2023
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Life insurance is a valuable financial tool that can help provide protection and peace of mind for individuals and their loved ones. It offers a payout in the event of the insured person's death, helping to cover expenses such as funeral costs, outstanding debts, and income replacement for the family.

While some traditional life insurance policies are known to require a lengthy application process and medical underwriting, instant life insurance has emerged as a convenient and efficient alternative. 

What is instant life insurance?

Instant life insurance, also known as simplified issue or no-exam life insurance, is designed to provide coverage quickly and without the need for a medical examination or doctor appointment. Instead, you’ll typically be asked to answer a few health questions. This type of insurance is particularly appealing to individuals who want immediate coverage or those who may have health issues that could complicate the application process for traditional life insurance.

How instant life insurance works

To make getting an instant life insurance policy as easy as it sounds, here’s a step-by-step breakdown of the process:

Start with an online application

The instant life insurance process typically begins with an online application. Insurance companies offering this type of product are usually all about having a streamlined application form to gather the necessary information quickly. Some of the basic information you’ll need to provide will likely include: 

  • Age and gender - These are the key factors in figuring out the rate you’ll pay.
  • Occupation – What you do for a living can help insurance companies determine your risk level such as if you do a dangerous or stressful job or how sedentary you may be during working hours, which may impact your fitness level.
  • Lifestyle habits – Whether or not you smoke is one of the main questions, but you may also be asked about how often you exercise, if you’re up to date on health screenings, how active you are, if you have any potentially dangerous hobbies, and other such questions.
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Answer health questions

Instant life insurance applications typically include a set of health-related questions in lieu of a medical exam. These questions are designed to assess your overall health and medical history. Questions vary depending on the insurance company, but you can expect to be asked about pre-existing medical conditions, recent surgeries, and family history.

Though it may be tempting to hold back on the information you reveal (like a chronic illness), or lie about your weight or the fact that you smoke, you should always be honest and forthright. If you purposely misrepresent yourself on an instant life insurance application and it’s discovered, you may lose your coverage. If you pass away and the insurance company finds out you lied after the fact, your beneficiaries could lose out on their death benefit payment. The bottom line is that knowingly falsifying your application is a type of fraud.

Go through the underwriting process

Once the application is submitted, the insurance company reviews the information you shared and determines your risk profile. The underwriting process for instant life insurance is typically faster than traditional life insurance since it does not involve a medical examination, but may include the review of your medical records, even after coverage has been issued. During this process, you may be asked to share documentation to help verify something in your application.

Receive a decision from the insurance company

After completing the underwriting process, the insurance company makes a decision regarding your application. With instant life insurance applicants may receive an immediate decision on their eligibility for coverage, or it could take a couple of business days if you have a unique situation. It’s likely that things should go faster than if you had gone the traditional route.

If approved, you can decide if you are satisfied with the offer and want to complete the purchase of the policy.

What instant life insurance costs

Instant life insurance policies, just like traditional life insurance, usually offer a range of coverage amounts so you can choose the appropriate level of protection for your needs. In general, you can expect that the premiums for instant life insurance could be higher than fully underwritten policies due to the higher level of risk the insurer is taking on. However, you might find that the convenience and speed of obtaining coverage without a medical exam is worth the slightly higher cost.

What to expect once you get an instant life insurance policy

Once the policy is purchased, the insurance company will issue the policy documents. These will outline the terms and conditions, coverage amount, and the length of the policy. It is crucial for policyholders to review the details carefully to ensure they understand any exclusions or limitations to the coverage.

If a guaranteed issue policy, there may be a waiting period before the full death benefit is payable, usually within the first two or three years. If the insured person dies within the waiting period, the policy may only provide a refund of premiums paid or a percentage of the coverage amount.

Despite these limitations, instant life insurance offers significant benefits, including convenience and accessibility. It allows individuals to obtain coverage quickly, without the need for medical exams or a lengthy underwriting process. If you have time constraints, instant life insurance can provide an effective solution to help secure financial protection for your loved ones.

Fast track the road to life insurance

Instant life insurance offers a simplified and expedited process for obtaining life insurance coverage. Through online applications, streamlined underwriting, and no medical exams, individuals can help secure protection for their families swiftly and conveniently, just by answering a few health questions.

Get started now with your free quote, risk-free.

ChatGPT was used for idea generation, but the author made significant modifications and takes ultimate responsibility for the content.

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