When I talk to people about life insurance, one of the most common questions I hear is: “What’s the difference between simplified issue and fully underwritten policies?” It’s a great question, and understanding simplified issue term insurance can help you make the right choice for your family’s financial protection.
For a complete overview, see our complete guide to final expense insurance.
I’ve helped hundreds of families navigate these options, and I want to share what I’ve learned about simplified issue term insurance—when it makes sense, when it doesn’t, and how to decide if it’s right for you.
What Is Simplified Issue Term Insurance?
Simplified issue term insurance is exactly what it sounds like—a streamlined, simplified approach to getting life insurance coverage. Instead of the traditional medical exam, blood work, and extensive health questionnaire, you answer a limited number of health questions (typically 8-15) and can often get approved the same day.
Think of it as the express lane at the grocery store. You’re trading some flexibility and potentially better rates for speed and convenience. But just like that express lane, there are specific rules about what qualifies.
How Simplified Issue Term Insurance Works
The process is refreshingly straightforward:
- Answer health questions - Usually 8-15 yes/no questions about your health history
- No medical exam required - No nurse visit, no blood draw, no urine sample
- Quick underwriting - Decisions often made within 24-48 hours
- Coverage begins - Once approved, your coverage starts immediately
The insurance company relies on your answers to their health questions, along with prescription drug databases and other available records, to make their decision.
Key Features of Simplified Issue Policies
Coverage Amounts
Most simplified issue term policies offer coverage between $25,000 and $500,000, though some carriers go higher. The sweet spot tends to be $50,000 to $300,000—enough to cover final expenses, pay off a mortgage, or provide income replacement for a few years.
Term Lengths
You’ll typically find 10, 15, 20, and 30-year term options, just like fully underwritten policies. The coverage works the same way—level premiums for the term period, then renewable at higher rates.
Age Limits
Most carriers offer simplified issue term insurance to applicants between ages 18-70, though the age ranges vary by company and coverage amount.
The Health Questions: What to Expect
The health questions are designed to screen out high-risk applicants quickly. Here are examples of common questions you might see:
- Have you been diagnosed with or received treatment for cancer in the past 5 years?
- Do you currently use oxygen therapy or have you been advised to use it?
- Have you had a heart attack, stroke, or been diagnosed with congestive heart failure?
- Are you currently receiving disability benefits?
- Do you use tobacco products or nicotine replacement therapy?
These questions are “knockout” questions—if you answer yes to any of them, you’ll typically be declined for simplified issue coverage. But that doesn’t mean you can’t get life insurance; it just means you’ll need to go through the fully underwritten process.
Simplified Issue vs. Fully Underwritten: The Real Differences
Speed and Convenience
Simplified Issue: Same-day to one-week approval Fully Underwritten: 2-8 weeks typical
When my clients need coverage quickly—maybe they’re buying a house next week or have a business deal closing—simplified issue can be a lifesaver.
Health Requirements
Simplified Issue: Pass the health questionnaire, and you’re likely approved Fully Underwritten: Medical exam, blood work, sometimes medical records review
Cost Comparison
Here’s where it gets interesting. Simplified issue premiums are typically 20-40% higher than fully underwritten rates for the same coverage. You’re paying for convenience and speed.
For a healthy 40-year-old male looking for $250,000 of 20-year term coverage:
- Fully underwritten (Preferred Plus): ~$25/month
- Simplified issue: ~$35-40/month
Coverage Limits
Simplified issue maxes out around $500,000 with most carriers, while fully underwritten can go into the millions.
Who Should Consider Simplified Issue Term Insurance?
In my experience, simplified issue works best for these situations:
The “I Need It Now” Scenario
Maybe you’re closing on a house in two weeks and need coverage to protect the mortgage. Or you’re traveling internationally and want protection in place before you leave. Simplified issue gets you covered quickly.
Minor Health Issues That Complicate Fully Underwritten
If you take medication for anxiety or have well-controlled high blood pressure, you might pass simplified issue easily but face delays and potentially worse ratings with full underwriting.
The “Testing the Waters” Approach
Some people use simplified issue as temporary coverage while applying for a larger fully underwritten policy. Once the big policy is approved, they can cancel the simplified issue coverage.
Older Applicants with Good Health
If you’re in your 60s or early 70s and in good health, the premium difference between simplified issue and fully underwritten might be smaller, making the convenience worth it.
Who Should Skip Simplified Issue?
Young, Healthy Applicants Needing Large Coverage
If you’re 30, healthy, and need $500,000+ in coverage, you’ll save significant money going fully underwritten. The time investment pays off in lower premiums.
Anyone Who Can’t Answer “No” to All Health Questions
If you have any of the knockout conditions, don’t waste time with simplified issue. Go straight to fully underwritten where your condition can be properly evaluated.
Budget-Conscious Families
If every dollar matters in your monthly budget, the 20-40% premium savings from fully underwritten coverage can add up to thousands over the life of the policy.
Common Simplified Issue Health Knockouts
Based on my experience with multiple carriers, these conditions typically disqualify you from simplified issue:
Cardiovascular:
- Heart attack, stroke, or TIA
- Congestive heart failure
- Coronary artery disease requiring treatment
Cancer:
- Any cancer diagnosis within 2-5 years (varies by carrier)
- Currently undergoing cancer treatment
Respiratory:
- Oxygen use for any reason
- Severe COPD or emphysema
Other Serious Conditions:
- Diabetes with complications
- Kidney disease requiring dialysis
- HIV/AIDS
- Multiple sclerosis, ALS, or other degenerative diseases
- Current substance abuse treatment
Lifestyle Factors:
- Currently residing in a nursing home
- Receiving disability benefits
- Participating in high-risk activities (racing, extreme sports)
The Application Process: What to Expect
Step 1: Choose Your Coverage
Decide on the coverage amount and term length. Most people choose 20 or 30-year terms for income replacement needs.
Step 2: Answer Health Questions Honestly
This cannot be overstated—answer every question truthfully. Insurance companies share information, and they will find out about undisclosed conditions. It’s better to be declined upfront than to have a claim denied later.
Step 3: Complete Financial Information
Even simplified issue requires basic financial information to ensure the coverage amount makes sense relative to your income.
Step 4: Wait for Decision
Most carriers make decisions within 24-48 hours. Some offer instant approval for qualifying applicants.
Step 5: Review Your Policy
Once approved, carefully review your policy documents. You typically have a 30-day “free look” period to cancel if you change your mind.
Costs and Considerations
Premium Structure
Simplified issue term insurance works like any term policy—level premiums for the initial term period, then renewable at higher rates. The difference is you’re starting with higher premiums due to the simplified underwriting.
Rate Classes
Most simplified issue policies offer just two rate classes: non-tobacco and tobacco. You won’t see the preferred plus, preferred, and standard classifications of fully underwritten policies.
Renewal Options
When your term expires, you can typically renew the coverage (at much higher rates) or convert to a permanent policy without medical underwriting, subject to age and time limits.
Tips for Getting Approved
Be Completely Honest
I cannot stress this enough. The few extra questions they ask are designed to identify the conditions they can’t insure. If you have any of those conditions, simplified issue isn’t for you anyway.
Time Your Application
If you’ve recently been diagnosed with something but haven’t started treatment yet, you might want to wait until the condition is stable and controlled.
Consider Multiple Carriers
Different carriers have different risk appetites and health questions. What gets you declined with one company might be acceptable with another.
Work with an Independent Agent
This is where working with someone like me makes a difference. I know which carriers are more lenient on certain conditions and can direct you to the right company from the start.
Converting to Permanent Coverage
Most simplified issue term policies include conversion options, allowing you to convert some or all of your coverage to permanent life insurance without medical underwriting. This can be valuable if your health deteriorates during the term period.
The conversion period is typically limited to the first 10-20 years of the policy or until age 65, whichever comes first. The permanent policy will be at standard rates, not preferred rates.
When to Consider Reapplying
If you initially chose simplified issue due to time constraints or minor health concerns, you might want to reapply for fully underwritten coverage later, especially if:
- Your health has improved
- You’ve lost weight or quit smoking
- You need additional coverage
- You want to lock in better rates for a longer term
- Choose simplified issue term insurance when you need coverage quickly, as you can get approved within 24-48 hours by answering just 8-15 health questions instead of waiting weeks for medical exams.
- Expect coverage amounts between $25,000 and $500,000 with standard term lengths of 10, 15, 20, or 30 years, making it suitable for covering final expenses, mortgages, or short-term income replacement.
- Prepare for “knockout” health questions that focus on serious conditions like cancer, heart disease, or disability benefits - answering yes to any typically results in automatic decline.
- Accept slightly higher premiums compared to fully underwritten policies as the trade-off for speed and convenience of skipping medical exams and extensive health screenings.
- Consider fully underwritten coverage instead if you have health issues that would disqualify you from simplified issue, as it doesn’t mean you can’t get life insurance through traditional underwriting.
The Bottom Line on Simplified Issue Term Insurance
Simplified issue term insurance serves an important purpose in the life insurance landscape. It’s not the cheapest option, but it’s not supposed to be. You’re paying for speed, convenience, and the ability to get coverage when traditional underwriting might be problematic.
In my practice, I typically recommend simplified issue for:
- People who need coverage immediately
- Those with minor health issues that complicate traditional underwriting
- Older applicants who want to avoid medical exams
- Anyone who has been declined for fully underwritten coverage due to build or minor health issues
The key is understanding what you’re getting and what you’re giving up. If you’re young, healthy, and need substantial coverage, invest the time in full underwriting. If you need coverage now and are willing to pay a bit more for convenience, simplified issue could be perfect.
Remember, having some life insurance is always better than having none. If simplified issue gets you covered today while you work toward a better solution long-term, it’s serving its purpose.
Finding the right life insurance doesn’t have to be complicated. As an independent agent, I work with multiple top-rated carriers and can help you compare options to find the best coverage at the best price.
Related Reading
- Affordable Final Expense Insurance: Your Complete Guide
- Burial Insurance for Seniors Over 70: Your Complete Guide
- Burial Insurance for Seniors Over 80: Your Complete Guide
- Funeral Insurance for Seniors: Your Complete Guide
Let me do the shopping for you. I’ll compare quotes from multiple companies and help you find coverage that fits your needs and budget, whether that’s simplified issue, fully underwritten, or another option entirely.
