Typically when you apply for life insurance, you go through a paramedical exam as part of the underwriting process so the insurer can find out how risky you are to insure. The exam helps them set your premium rate.
With simplified issue life insurance you can skip the medical exam. That’s the “simplified” part of this policy type. This is also known as a “no exam policy.” You’re not out of the woods completely, though. You don’t need to go through the medical exam, but you do need to fill out a health questionnaire, answering questions like if you smoke, have been diagnosed with serious illnesses, and so on.
People in poor health may have to take the exam if they have too many health issues, and they could flat-out be denied by insurers. For healthier people in a hurry it can be a way to skip scheduling the paramedical exam, which adds some time to the underwriting process.
But with this benefit comes a major financial drawback.
With a term life insurance policy, your premium rates are directly tied to your chances of outliving your policy. If you’re young and/or healthy, you’ll pay lower rates than someone who is older and/or in poor health. That’s why the medical exam is important. Since there is no medical exam with simplified issue life insurance, the policies tend to be more expensive than term policies.
Even if you think a term life policy will be prohibitively expensive, it’s worth getting a free quote to see exactly how much you’d pay. You may be surprised at how affordable it is.
See our full cost guide to determine how much life insurance may cost for you.