Life Insurance
What Is Simplified Issue Life Insurance?
Jan 27, 2021
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There's no denying health plays a significant role in life insurance. Traditionally, the younger and healthier you are, the lower your monthly premiums will be. It's just one reason why getting life insurance while you're young is generally recognized as your best bet.

As you age, your health becomes more important. It can impact both your ability to get life insurance and your monthly premium. Most life insurance companies will require detailed health information from you, plus a medical exam, before moving forward with your application. It's a typical part of the underwriting process.

If you've decided to wait to get life insurance and have developed health issues, it could be more difficult or expensive to get the coverage you need. Simplified issue (SI) life insurance is one way to get your desired coverage without getting bogged down in a lengthy process of medical exams and questionnaires.

Want to learn more about this type of coverage? Here's what you need to know about simplified issue life insurance.

What is simplified issue life insurance, and how does it work?

Simplified issue is a type of life insurance where the underwriting process is more streamlined and straightforward. Rather than submitting a lengthy application, which can sometimes run upwards of 60 questions, you’ll answer a few questions about your personal and medical history. Typically, you'll be asked things like if you are a smoker or have any other major health issues.

With Ethos, once you've filled out your application, you'll get an instant decision. You'll know right away if you're approved for coverage, without needing to wait for a medical exam or other tests. You can also start your coverage instantly, as soon as you pay your first premium, so you don't have to wait for paperwork to be processed either.

How does simplified issue underwriting differ from other types of life insurance underwriting?

You might wonder how simplified issue underwriting differs from underwriting with other types of life insurance. Here's a basic rundown of some of the key differences to know as you explore your options to decide which type of underwriting may be best for you.

Simplified issue vs. fully underwritten term life insurance

Ethos offers both simplified issue and fully underwritten term life insurance policies. Just like fully underwritten term life, an SI term life product allows you the flexibility to select from a few different term options, ranging from 10 to 30 years. Because of our proprietary technology, fully underwritten term life can also offer a relatively simple application process. Fully underwritten products tend to have a more affordable premium when compared to a simplified issue product because the insurance company learns more about your unique health circumstances. When applying for a fully underwritten term life insurance policy, you may still need to undergo a physical and medical exam as part of the underwriting process. Though, with Ethos, most people are able to apply without needing a medical exam—the application questions are often enough for us to evaluate your eligibility.

Compared to a simplified issue life insurance policy, fully underwritten term life insurance will usually have a longer application process. Additionally, fully underwritten term life policies typically offer a higher death benefit.

Simplified issue vs. guaranteed issue life insurance

If you have a pre-existing condition, you might not qualify for all life insurance underwriting options, but guaranteed issue could be an option.

Like simplified issue, guaranteed issue doesn't require a medical exam or lab tests. In fact, you don't need to provide any health information at all. This type of product skips the traditional underwriting process. However, because of that, the coverage can be a bit more expensive, and has a limited age range and a smaller death benefit. A guaranteed issue whole life policy with Ethos offers coverage to those between 65 and 85 years old with a maximum death benefit of $25,000. Learn more about that product here.

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The advantages and disadvantages of simplified issue life insurance

As with any life insurance coverage, there are both potential benefits and limitations. What might work best for you may not be a good fit for someone else. So, it pays to have a clear picture of the pros and cons before you make any final decisions.

Advantages:

  • For many, the biggest advantage of a simplified issue policy is the quick and streamlined underwriting process. You can have a decision on your coverage in minutes.
  • There are no medical exams or lab tests needed, just a few health related questions. That saves you quite a bit of time during the application process, meaning you can get coverage quickly.
  • Simplified issue policies often have higher death benefits and lower premiums compared to guaranteed issue policies. That means you have the option to request more coverage for your family.

Disadvantages:

  • Simplified issue life insurance will typically have higher premium costs compared to typical, fully underwritten term life insurance. You'll need to determine if those costs fit your budget.
  • Simplified issue life insurance also offers lower coverage amounts compared to fully underwritten term life insurance, so you might not be able to get as much coverage as you'd like.

Before you purchase any life insurance policy, make sure you understand the advantages and disadvantages. That way, you'll have the information to choose the right coverage.

Who is simplified issue life insurance good for?

There is no one-size-fits-all policy, but here are some instances where simplified issue is an especially good fit:

  • You have a term life insurance policy that's expired and you'd like a new policy to provide you with life insurance coverage.
  • You need life insurance, but you don't think you would qualify for a fully underwritten policy.
  • You think that you may not be able to get any life insurance coverage because of your age, health, or financial standing.
  • You want your family not to have to worry about paying for your final expenses.
  • You don't want to go through the process of waiting for medical exams or lab tests.
  • You're ok with paying for a higher premium for the unique benefits of simplified issue coverage.

Now you know who might be a good fit for this type of coverage, but who may be better served exploring other options?

If you're younger and in good health with good financial standing (an average to good credit score), fully underwritten term life insurance will probably be a better fit for your situation and needs.

How to get SI life insurance with Ethos

Now that you know what simplified issue life insurance is, you may be interested in learning more. Ethos can help. We now offer SI term life insurance, available for applicants aged 20 to 70. To learn more about the details of this product, visit our site for more info. If you're interested in applying, here's what to expect.

You’ll start by answering a few basic questions, where we will take out the guesswork on your part and determine your eligibility for this product against others we offer. If it’s determined that SI term life insurance is the best fit for you, you’ll then answer a few personal questions (including but not limited to) areas like your insurance, criminal, and medical history, and you're good to go. No need to worry about medical exams, lab tests, or lengthy questionnaires.

Once you submit your application, you'll get an instant decision. If you're approved, choose from your term and coverage options, pay your premium, and your coverage will begin immediately. From approval to coverage, it can all be done in just minutes.

With a guaranteed renewal benefit, you have the option of renewing your coverage once the term is over, regardless of your health. Plus, your premium will stay the same throughout the duration of your initial term.

If you've decided that a simplified issue life insurance policy might be the right fit for your needs, explore your options with Ethos. Start your free online application today, and you could have the coverage you need in minutes.

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