Guaranteed acceptance life insurance and simplified issue no medical life insurance provide insurance alternatives to those whose medical profile or lifestyle make it otherwise difficult to get coverage
Simplified Issue Life Insurance
- to qualify you need to answer some medical questions but no medical reports nor medical exams are required
- Coverage amounts available range from $1000 to $150,000
- term options offered include a 10 year term, a 15 year term, 20 year term, a 25 year term or a term to 100 policy
- term to 100 and whole life policies provide lifetime coverage at a guaranteed fixed rate
- some permanent insurance policies include cash surrender values and reduced paid up insurance
- most no medical life insurance policies include an additional benefit payable in the event of an accidental death, equal to 1 to 5 times the base amount
- some insurers provide a living benefit which pays up to 50% of the death benefit in the event the insured is diagnosed with a terminal illness where his or her life expectancy is less than 12 months
- non-smoker rates are usually reduced by 20 to 40%
Guaranteed issue life insurance
- guaranteed acceptance no medical questions asked
- choice of coverage amounts offered range from $5,000 to $25,000
- premiums and face amount may be guaranteed for life
- an additional accidental death benefit is often included and pays an amount equal 1 to 5 times the face amount
- if natural death occurs during the first 24 months of coverage, the premiums paid are reimbursed with interest, full coverage kicks in on 25th month
- a living benefit is often included, a one-time cash advance of up to 50% of the sum insured should an insured be diagnosed with a terminal illness with a life expectancy of 12 months or less.
Rule of thumb:
There is a direct correlation between premium rates charged and risk. As a result, the fewer the medical questions asked on an application, the higher the risk to the insurer and the higher the rates. Conversely the more elaborate the underwriting process is, the lower the risk and the better the rates.
Non-medical life insurance often referred to as a simplified issue, requires no medical tests and no and doctor’s report. However, to qualify you’re required to answer “no” to the 7 to 20 medical questions asked. Middle of the road prices, usually the best solution for applicants who’ve experienced more serious medical issues but their conditions have been stable for years.
The key is stability over time, no change in medication and no treatments administered during the last 24 months, some insurers may require a 60 month period. A good example of a person who could qualify for a permanent insurance simplified issue would be a heart patient who had a stent installed 3 years ago, no other treatment has been required and no change in his medication since.
Guaranteed issue life insurance or guaranteed acceptance life insurance, should be considered as a last resort, as the death benefit is deferred 24 months and the cost per $1,000 of insurance is the highest among the 3 methods presented. Guaranteed issue life insurance provides an opportunity to get insurance when no other option is available.