Simplified Issuance Insurance
What is Simplified Issuance Insurance?
A Simplified Issuance Life insurance plan is a good bet if you want to get an insurance plan in place quickly and easily. However, there are caveats to choosing this type of life insurance policy.
We will cover the pros and cons of a Simplified Issue life insurance policy below, but first we will go over some details for you to sink your teeth into.
What does a Simplified Life Insurance Plan include?
The Simplified Life insurance policy choices are less flexible than some of the other more popular plans, with smaller death benefits and payouts. But due to the ease of getting a Simplified Insurance plan quickly, they are ideal for end-of-life care expenses, including funeral and burial costs. But the ease of obtaining this type of life insurance plan comes at a price.
What will I Pay for a Simplified Life Insurance Policy?
For a Simplified Life insurance plan, premiums are level during the initial selected term but increase at each renewal period. Premiums under this policy type run high, sometimes twice as expensive as other life insurance policies.
What are the Main Benefits of a Simplified Life Insurance Policy?
There are multiple benefits to holding a Simplified Issue plan, including omitting the requirement to have a medical examination.
While a Simplified policy’s premium is quite pricey, it is not a fully underwritten policy, so it’s quick and easy to get a policy up and running.
Also, a policyholder’s insurance coverage starts as soon as their application is confirmed, and the premium is set. This compares to issuance of 1 to 2 months for a fully underwritten policy.
What are the Major Drawbacks to a Simplified Issue Life Insurance Policy?
As a result of reduced medical requirements, the premiums for Simplified Issue life insurance policy premiums are much higher than a comparable Term or permanent Whole Life policy.
Why Choose a Simplified Issue Life Insurance Policy?
While a Simplified Issue Life Insurance plan provides lower insurance coverage amounts (e.g., $100K to $250K) and rates are high (due to the high-risk factor for insurance carriers), here are a few reasons this policy type may be for you:
- You have a health issue and prefer not to take a medical examination.
- The application process is easy and quick (takes 1-2 days vs. 2 months for other life plan applications.)
For advice and options for life insurance based on your situation, we would be happy to walk you through a term, permanent or simplified life insurance policy at your convenience.
Remember, when you plan now for you and your loved ones with a solid life insurance policy, you save money and gain peace of mind for years to come.
Other Insurance Products
Term Life Insurance
Term life insurance provides coverage within a specified time period (“term” of years), paying out a death benefit to a beneficiary when the policyholder dies. Once your term insurance policy expires or the policyholder reaches a certain age, they are required to renew the term insurance policy at a higher premium.
Permanent Life Insurance
Permanent life insurance protects you if you are looking for a long-term option to cover you and your family when you may have a financial impact from death. While there are many advantages to this policy type, the one major con is the premium is significantly more expensive compared to other life insurance policies.
Simplified Issuance Insurance FAQs
Below are common questions answered about simplified issuance insurance.
The policyholder pays the minimum required premium (or more, subject to the maximum amount allowed under the Income Tax Act).
The cost of insurance (COI) charges is deducted each month. COI options are Level or Yearly Increasing (YRT) and fully paid up to the age of 100.
A good candidate for a Universal Life insurance policy is someone who wants a permanent life insurance plan with evolving needs and additional tax efficient pre-funding.
When the policy’s contract expires, there are quick pay options (Level for 10, 15 or 20 years).
If you have a permanent policy like a Whole Life insurance plan and you need the cash, you can cancel (surrender) the policy.
Cash surrender values allow for policy loans, automatic premium loans (if a premium is missed), third-party borrowing (using the policy as collateral) and cash surrenders when a portion or all the permanent life insurance policy is cancelled.