Many Canadians don't realize that you can get life insurance policy without a medical life insurance exam.
There are three main types of no medical life insurance in Canada - Accelerated Issue, Guaranteed Issue and Simplified Issue.
Each type of no medical life insurance works has its own advantages and disadvantages so it's important to compare them before making a decision.
Read on because this article breaks down the three main types of no medical life insurance, ensuring you understand their benefits and limitations.
- There are three types of no medical insurance policies available in Canada: accelerated issue life insurance, guaranteed issue life insurance, and simplified issue life insurance.
- Some no medical life insurance policies include a waiting period, usually up to two years.
- The insurer is likely to refund premium dollars paid into the policy before the waiting period if the policyholder dies during that time.
What types of no medical life insurance policies are available in Canada?
Accelerated issue life insurance
Guaranteed issue life insurance
Simplified issue life insurance
What is accelerated issue life insurance?
The average fully-underwritten life insurance policy takes roughly six weeks for approval. Some people do not have the luxury of time when trying to buy life insurance. And if you are in perfect health, you wouldn’t want to pay extra for faster approval.
That’s where accelerated issue life insurance policy comes into play.
It promises instant approval and is priced similar to standard life insurance policies.
But the catch is you must be in good health. If you are not, you may have to take a medical life insurance plans examination.
Accelerated underwriting policies use sophisticated algorithms to calculate the risk of insuring you and choosing premium rates. When applying, you will have to answer some health-related questions.
Life insurance providers will enter this information and other data like your driving record, into their algorithm.
Depending on the results, you may receive approval without having to take a medical life insurance examination. If you don’t, life insurance providers will request you to complete a medical life insurance test.
|Easier, faster application.
|You may need to take medical exams if your health is less than perfect.
|Pricing similar to traditional life insurance policies.
|The insurer can deny coverage.
|Higher death benefit amounts available than simplified and guaranteed life insurance.
What is guaranteed acceptance life insurance with no medical exam?
Guaranteed acceptance life insurance insurance provides coverage regardless of your medical exam history — hence the name. You don’t need to take a medical life insurance work examination and may or may not answer medical exam questions (depending on the broker). Effectively, it is basically no-questions-asked guaranteed acceptance life insurance.
However, it is significantly more expensive than permanent life insurance and simplified issue life insurance. And the coverage amount of guaranteed acceptance life insurance is rather limited, usually just enough to take care of end-of-life expenses. For this reason, it is also called funeral expense life insurance or burial insurance. Unlike standard whole life insurance policies, guaranteed issue doesn’t include a savings component.
Most guaranteed acceptance life insurance policies include a waiting period, usually two years. You need to hold on to your policy for two years before it pays out the death benefit to your family. If you die within this time, the insurance provider will refund the premium dollars paid into the policy to your family.
Guaranteed acceptance life insurance is for people who are seniors or unhealthy or both. If better insurance options may be available, it's best to talk with your insurance broker first.
|Easy application process. Doesn’t require you to complete a medical test or answer health questions.
|Limited death benefit amount
|Guaranteed approval, as long as you are under a certain age. The age range is typically between 40 and 85.
|Includes a waiting period. Your family will receive only the partial death benefit if you pass away within this time.
|Premiums are much higher compared to policies with full medical underwriting.
What is simplified issue life insurance with no medical exam?
Simplified issue life insurance offers lifetime protection. But unlike permanent life insurance, which has full medical exam underwriting, it offers only basic life insurance coverage and doesn’t accumulate cash value.
You don’t need to complete a medical exam, but must answer some medical questions to qualify. Not everybody who applies gets approval. The premium rates are considerably higher than fully underwritten permanent life insurance policies, while the benefit amount is much lower.
Some these life insurance policies have a waiting period, usually two years. Your family receives the policy's proceeds only after the waiting period. If you die within the first two years, the insurer will not issue the payout. Instead, it will pay your family the premium dollars you had paid.
This type of life insurance policy can be the right choice for people who don't qualify for a traditional life insurance policy or permanent life insurance, but are otherwise in reasonably good health.
|Doesn’t include a medical test. You only need to answer some simple health questions to qualify.
|Approval isn’t guaranteed.
|Application process is much quicker than traditional life insurance.
|Coverage amount is limited.
|Considerably more expensive than standard life insurance policies.
How long is the waiting period for different no medical life insurance policy options?
Some no medical life insurance policies include a waiting period, usually up to two years.
These are typically designed for people who have a serious health condition or who are currently undergoing treatment.
Your family will not receive the benefit amount if the claim is filed during the waiting period.
However, the insurer is likely to refund premium dollars paid into the before then.
Accelerated issue life insurance vs. simplified issue life insurance vs. guaranteed issue life insurance
Here’s a quick comparison guide.
|Best suited for People
|In good health seeking faster approvals.
|You may have to complete a medical test.
|Maximum death benefit amount
|1-3 business days
|Instant issue to 2 days
In the case of simplified issue life insurance, you need to answer health questions to qualify. Plus, the insurance companies can turn down your application if you are in poor health.
On the other hand, guaranteed acceptance life insurance doesn’t include medical history questions. The insurer can’t deny coverage, provided you are not above a certain age, usually 85.
Simplified issue offers more life insurance and is cheaper than guaranteed life insurance.
In conclusion, Canada offers three types of no medical life insurance policies, each with its own advantages and disadvantages. The right choice for you will depend on your unique needs, what options are available to you, the amount of life insurance coverage required, and your budget. It's like picking out the perfect armor that fits you best!
If you're in a hurry and in good health, the accelerated issue life insurance could be your go-to option. With instant approval and pricing similar to standard policies, it's like getting the protection you need without any long waiting periods.
On the other hand, guaranteed acceptance life insurance is there for those who may have health issues or are seniors. It's like having a magic health potion that covers you regardless of your medical history, making it perfect for people who need coverage without answering too many questions.
Lastly, we have the simplified issue life insurance, which offers lifetime protection without the need for a full medical exam. It's like having a sturdy protective bubble around you, giving you peace of mind. However, the premium rates are higher, and the coverage amount is lower compared to fully underwritten policies.
When considering these options, think about what best suits your situation. Take your time, do some research, and have a chat with your insurance broker. It's like going on a quest to find the perfect shield that complements your needs and protects your loved ones.
Remember, choosing the right no medical life insurance policy is like selecting the right tool for the job — it can make all the difference in providing financial security for you and your family. So, don't rush into anything and give yourself plenty of time to make the best decision possible. Just like an adventurer preparing for a journey, equip yourself with knowledge and choose wisely!
Steven has a deep background in life insurance. At Dundas Life, he's helped 1000s of clients find the right insurance coverage while also training dozens of insurance advisors during his career. Previously at Finaeo, Steven oversaw compliance and coaching for over 350 independent insurance brokers. Steven is also rated the #1 Insurance Agent in Toronto on Rate-My-Agent.