Types of No Medical Life Insurance in Canada

There are many types of no medical life insurance in Canada. Learn more about them, their pros and cons, and which one is right for you.

April 1, 2021

Many Canadians don't realize that you can get life insurance without needing 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 insurance has its own advantages and disadvantages so it's important to compare them before making your decision on which is best for you.

What types of no medical insurance policies are available in Canada?

Top life insurance companies offer three types of no medical insurance policies in Canada.

  • Accelerated issue life insurance
  • Guaranteed issue life insurance
  • Simplified issue life insurance
Blank Notes and Medicines

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 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 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.

Pros Cons
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 issue life insurance with no medical exam?

Guaranteed issue life insurance provides coverage regardless of your medical history — hence the name. You don’t need to take a medical life insurance examination and may or may not answer medical questions (depending on the broker). Effectively, it is basically no-questions-asked life insurance.

However, it is significantly more expensive than permanent life insurance and simplified issue life insurance. And the coverage amount 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 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 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.

Pros Cons
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 underwriting, it offers only basic coverage and doesn’t accumulate cash value.  

You don’t need to complete a physical 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, while the benefit amount is much lower.

Some simplified issue 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.

Pros Cons
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.

What is the waiting period for different no medical life insurance options?

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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.

Accelerated Issue Simplified Issue Guaranteed Issue
Best suited for People In good health seeking faster approvals.
  • Seeking instant approval
  • Who don’t want to take a medical exam
  • With health issues
  • Seeking coverage to cover end-of-life expenses
  • Who don’t qualify for other types of life insurance products
  • With severe health issues
Health-related questions Extensive Limited None
Medical Test You may have to complete a medical test. No No
Maximum death benefit amount $1 million $50,000 $25,000
Approval time 1-3 business days Instant issue to 2 days Instant issue

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 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 coverage and is cheaper than guaranteed issue life insurance.

Conclusion

There are three types of no medical exam life insurance in Canada and they all have their pros and cons. The type that you choose will depend on your needs, what is available to you, how much coverage you need or want as well as your budget. With some research and consideration, finding an appropriate no medical life insurance policy should not be too difficult so give yourself plenty of time before making any final decisions about which one best suits your situation.

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