Going through the life insurance buying process can sometimes be quite difficult, especially if you are purchasing a traditional life insurance policy. Why? Because traditional life insurance requires you to answer invasive medical questions, take an extensive medical exam, and provide detailed medical records. On top of all of that, the underwriting process often takes 75 to 90 days to complete.
But did you know that…
It is possible to get life insurance fast–in minutes or hours, not weeks or months?
Today, I am going to go over precisely what “Simplified Issue” (also known as “fast life insurance”) is, how it works, and why it can be a good option for anyone who needs to buy life insurance quickly.
What Is Simplified Issue Life Insurance?
Simplified issue life insurance is a type of policy that allows you to obtain life insurance almost instantly, without waiting.
You are able to bypass the parts of the typical life insurance application process that often take so long–the medical exam, the medical records request, and even the telephone interview.
Instead, these modern insurance products are able to offer life insurance coverage instantly by obtaining data from a few sources:
Medical Information Bureau (MIB)
The Medical Information Bureau or MIB for short is basically an organization created by insurance companies to share information when consumers apply for certain types of insurance.
For example, if you applied for life insurance with Company A three months ago and were declined, this would be reported to the MIB.
If you then tried to apply for life insurance with Company B, they would see that you were declined for coverage with Company A, and use that information to determine if you can be approved for coverage with them.
Intelliscript (Prescription Drug Check)
I like to think of the Intelliscript report as a Credit Report for your prescriptions.
Every time you fill a prescription, it is added to your Intelliscript profile. (You don’t actually have to take the medicine; Intelliscript only knows if the prescription was filled.)
If you fill the prescription, it is added to your report, and an insurance company will use that information to help confirm how you answered the questions on your application.
For example, if you answer “no” to a question about being a diabetic, but your prescription report says that you are taking Metformin (a prescription used to treat diabetes), then the insurance company will probably want to investigate a little deeper.
Motor Vehicle Report (MVR)
Your motor vehicle report is used to ensure that you aren’t a reckless driver–they are looking for things like DUI’s, speeding tickets, and license suspensions for dangerous driving.
Believe it or not, people get declined for life insurance all of the time because of their driving record.
However, there are some cases where you may be able to work around a poor MVR: for instance, if your license was suspended due to unpaid parking tickets or unpaid child support.
Do Life Insurance Companies Pull Your Credit?
The previous three sources are the ones primarily relied upon to make a decision on your insurability. However, unlike most other insurance products, your credit report is NOT pulled to determine your eligibility for life insurance.
If you don’t have any red flags on the three reports, you will probably be able to apply for coverage online and get approved in minutes.
Fast Life Insurance Vs. Traditional Life Insurance
For now, the only advantages of traditional life insurance over simplified issue life are price and coverage amounts.
Each product is going to have term lengths ranging from 5, 10, 15, 20 and 30 years; however, traditional life insurance policies will be about 3% to 4% more affordable.
Fast life insurance products usually only can provide up to $1 million in coverage while a traditional, fully-underwritten life insurance policy can cover you for up to $20+ million in coverage.
Below is a quick chart with some of the main differences:
Fast Life Insurance Vs Traditional Life Insurance Chart
|Fast Life Insurance||Traditional Life Insurance|
|Online Application Process||Yes||No|
|Medical Exam Required||No||Yes|
|Medical Records Requested||No||Yes|
|Phone Interview Required||No||Yes|
|Approval Time||Instant – Few Days||Few Weeks – Months|
Who is Simplified Issue Life Insurance For?
Of course, Simplified Issue Life isn’t always a good fit for every situation; no product is. However, with that said, below are the main people who should look into a fast life insurance product:
If you are a young adult, then this type of life insurance may well be your first choice, because you are more likely to be 100% healthy. You may also find it convenient and comfortable to buy life insurance online, since you are probably already an avid online shopper.
We buy everything else online, why not life insurance?
People Afraid Of Needles Or Blood
If you are afraid of needles or blood, then this absolutely the best route for you to go.
This process doesn’t require any of those things to get you approved and also speeds up the process because of it.
Adults Who Constantly Travel
If you constantly travel, the last thing you probably want to do in your precious hours at home is be available to complete a medical exam.
These exams consist of a urine sample, a height/weight check, a blood pressure check, and, of course, they draw blood.
In fact, most people that start an insurance application don’t actually follow through to get life insurance, because they are unable to fit the invasive exam process into their schedule.
If You Just Hate Waiting
Until recently, 75 days was the “record” for a “fast” life insurance application. Could you imagine waiting 75 days for a purchase to come in the mail?
While the wait time for approval has improved recently, a traditional life insurance policy can can still take up to 60-90 days if complications arise.
If you hate waiting, going the simplified issue route is definitely your best option.
Now that you know you can purchase insurance like anything else that we buy online these days, you now have one less excuse as to why you don’t have life insurance.
There isn’t any reason to go without life insurance because the people we leave behind are the ones that will need it most.
You can either find this coverage online, or you can reach out to a local agent for help. But whatever you do, just be sure to get covered … the sooner, the better.