Non-Medical Life Insurance plans fall into two categories: Guaranteed Issue and Simplified Issue. While both categories do not require medical records or exams, they do differ in regard to overall applicant requirements, premium costs and policy benefits.
It is crucial for the consumer of insurance coverage, to truly understand what they are purchasing and to make sure that the option chosen is the one that is most suited to their needs, circumstances and is the best available.
So what is the difference between guaranteed issue and simplified issue insurance?
Guaranteed Issue Life Insurance Plans do not require medical questions or tests. Generally all that is needed to obtain coverage is your signature and a cheque. These plans tend to have higher premiums than Simplified Issue plans. Reason being is that with guaranteed issue coverage no questions are asked and everyone is grouped together. As this is the case the premium tends to be a lot higher then simplified issue coverage.
Guaranteed issue plans also have a two-year waiting period on death benefits. For instance, if the insured dies from natural causes within the first two years after issuance of the policy, policy benefits will not be paid out. Instead, any premium payments made to date are refunded, sometimes with interest.
Simplified Issue Life Insurance Plans do not require medical tests. They do, however, require the applicant to answer a series of short questions, some of which the applicant needs to be able to answer “no” to. By asking questions, risk is assessed and various products can be offered with a higher available benefit amounts and lower premiums.
Examples of typical questions include:
- *within the past THREE years, have you had or been treated for cancer, an immune system abnormality including HIV/AIDS, an organ transplant, etc.
- *within the past TWO years, have you applied for life insurance which has been denied or postponed?
- *within the past SIX months, have you undergone any medical tests for which a diagnosis has not yet been reached?
Some advantages of a Simplified Issue plan include greater flexibility, plan options, cheaper premium and coverage from day one. Some plans do have a two-year waiting period on death benefits, while other plans pay out an immediate death benefit.
With all the various life insurance plans available, it can be confusing to determine which life insurance plan to choose. At Canada Protection Plan, we understand – and want to help you find the plan that best meets your needs at the most reasonable price to you.
Call us today at 1-877-851-9090 to get started or speak to your insurance advisor.
