Guaranteed Issue and Simplified Issue Life Insurance: Explained
Interested to know more about the different types of no-medical life insurance in Canada? We’ve got you covered with this helpful guide.
8 Minute read
Originally Published: June 4, 2021
Updated: May 21, 2024
Guaranteed Issue and Simplified Issue Life Insurance: Explained
Interested to know more about the different types of no-medical life insurance in Canada? We’ve got you covered with this helpful guide.
8 Minute read
Originally Published: June 4, 2021
Updated: May 21, 2024
If you are interested in life insurance in Canada, you’ve probably come across the term “no-medical life insurance”. This type of insurance is designed for difficult-to-insure individuals. It typically has a fast approval process and is much easier to qualify for.
The two main types of no-medical life insurance are guaranteed issue life insurance and simplified issue life insurance. This guide will explain the pros and cons of each, explain who can benefit from it, and go over the costs.
In this article
- What is Simplified Issue and Guaranteed Issue Life Insurance
- What Medical Information is Required When Applying For Life Insurance
- Fully Underwritten Life Insurance
- Simplified Issue Life Insurance
- Guaranteed Issue Life Insurance
- Deferred Life Insurance
- Cost of No-Medical Life Insurance
- Frequently Asked Questions (FAQs) About Guaranteed Issue and Simplified Issue Life Insurance
What is Simplified Issue and Guaranteed Issue Life Insurance
While looking for life insurance, you’ll commonly come across three types of life insurance: fully underwritten, simplified issue, and guaranteed issue. Fully underwritten life insurance is standard for traditional life insurance policies and is how most are underwritten. However, these policies can be harder to qualify for and require medical underwriting.
Simplified issue and guaranteed issue life insurance is a great option for those who may not qualify for traditional life insurance. Both policy types have fast approval times and do not require a medical exam to qualify. However, these policies do tend to cost more and offer lower maximum coverage than traditional policies.
Here is a quick overview of how the different types of policies compare:
What Medical Information is Required When Applying For Life Insurance
The main difference between fully underwritten life insurance, simplified issue life insurance, and guaranteed issue life insurance are the requirements to qualify.
Fully Underwritten Life Insurance Requirements:
- Your full medical history and family health history are disclosed.
- A medical exam is usually required but may be substituted with an attending physician’s report.
- Getting your height and weight measured and blood pressure checked.
- Insurance providers typically require medical tests such as blood testing and urine testing, and may also require other tests such as electrocardiograms.
- The premium costs will be adjusted based on your overall health, health history, family health history, and the medical exam and testing.
Simplified Issue Life Insurance Requirements:
- Medical underwriting is limited to medical questions, which can vary between insurers.
- No medical exam or medical tests are required.
Guaranteed Issue Life Insurance Requirements:
- No medical questions, medical exams, or medical tests are required.
- Coverage amount depends on company and age but is most often between 25K and 50K maximum
Fully Underwritten Life Insurance
Fully underwritten life insurance, also known as medically underwritten insurance or traditional insurance, is for people in good health with no serious medical or lifestyle concerns.
Applying for a fully underwritten policy typically (although not always) requires a medical exam done by a nurse visiting your home. This medical exam can consist of:
- Getting your height and weight measured.
- Providing blood and urine samples.
- Getting your blood pressure checked.
- Potentially taking other tests, such as an electrocardiogram.
The results for these tests and samples typically take a few days to a few weeks, which is why this type of insurance has the longest approval process. However, if you are in good health, you might qualify for a cheaper premium rate than you were quoted for.
In 2017, Manulife Insurance, Canada’s largest life insurance provider, introduced accelerated underwriting for life insurance policies. This new process reduced medical underwriting (no fluids or biometric testing) and has resulted in quicker underwriting decisions. Since that time, many life insurance carriers in Canada have followed suit. This has resulted in several options for approval with reduced medical requirements.
As of 2024, these are the coverage limits available for a fully underwritten life insurance policy with no blood or urine testing needed:
For Life Insurance
Ages 18 to 50, $5,000,000 or less
- Ages 51 to 60, $1,000,000 or less
- Ages 61 to 70, $99,999 or less
For Critical Illness Insurance
- Ages 18 to 40 for $250,000 or less of coverage
- Ages 41 to 50 for $100,000 or less of coverage
For Disability Insurance
- Ages 40 and under for up to $6,000 monthly income benefit
- Ages 41 and over for up to $2,500 monthly income benefit
Simplified Issue Life Insurance
Simplified issue life insurance is designed for Canadians with moderate health issues or those at an advanced age who may not qualify for traditional life insurance. This type of life insurance policy does not require any medical exams or testing to qualify, but notably still requires applicants to answer limited questions about their health. The main drawback of simplified life insurance compared to traditional insurance is that it is typically more expensive for less coverage, however, it is still typically more affordable than a guaranteed issue life insurance plan.
Here is a summary of the number of questions you will be required to answer for simplified issue products from different trusted Canadian life insurance providers.
Pros
Designed for those who have health issues, or are older and do not qualify for traditional life insurance.
Does not require any medical exams or medical testing.
Short approval process which can range from a few hours to a few days.
Premiums are less expensive than guaranteed issue life insurance plans.
The maximum coverage amount is higher than guaranteed issue life insurance, typically going up to $1,000,000 in coverage.
Cons
- While this type of insurance does not require a medical exam, it does ask limited medical questions to applicants, with questions varying between insurers.
- Premiums tend to be more expensive than traditional life insurance.
- The maximum coverage amount is typically lower than traditional life insurance coverage maximums.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is the easiest type of policy to qualify for with no medical underwriting required. It is designed for Canadians with serious health issues and those at an advanced age who may not qualify for traditional or simplified issue life insurance. The benefit of this type of life insurance is that it does not require a medical exam or tests and insurers do not inquire about an applicant’s health status. However, this type of insurance is more expensive with lower coverage amounts than traditional and simplified issue life insurance to reflect the increased risk to the insurer.
Here is an overview of guaranteed issue life insurance plans available through various popular life insurance providers in Canada.
Pros
- Designed for those who have more serious health issues, or are at an advanced age and do not qualify for traditional or simplified issue life insurance.
- Does not require any medical exams, medical testing, or medical questions.
- Short approval process which can range from a few hours to a few days.
Cons
It’s typically only offered as permanent life insurance coverage, with no option for term life insurance.
- Premiums are more expensive than traditional or simplified issue life insurance premiums.
- The maximum coverage amount is typically lower than traditional or simplified issue life insurance and typically only ranges from $25,000 – $50,000 in coverage.
Deferred Life Insurance
While most simplified issue and guaranteed issue plans provide immediate coverage as soon as an applicant is approved, some insurers, such as Industrial Alliance and Canada Protection Plan, offer deferred life insurance policies. Deferred life insurance refers to a type of policy where the insured is not covered for a specified period, typically 24 months. If death occurs during this time, the policy beneficiary will receive any previously paid premiums with interest, but will not receive a death benefit. Deferred policies ask fewer medical questions on applications, but do have more costly premiums.
Some insurers also offer deferred plus plans which function similarly but are less costly than regular deferred coverage. These plans also provide no coverage in the first 24 months but ask more medical questions of applicants.
Cost of No-Medical Life Insurance
The cost of a no-medical life insurance plan can vary between insurance providers. Here is a look at the monthly premium costs for simplified issue life insurance through Assumption Life and Canada Protection plan for Canadians aged 20-70:
Frequently Asked Questions (FAQs) About Guaranteed Issue and Simplified Issue Life Insurance
Neither simplified issue nor guaranteed-issue life insurance requires applicants to undergo a medical exam or medical testing. The difference between these policy types is that unlike guaranteed issue life insurance, simplified issue plans still ask applicants health-related questions. Simplified issue life insurance is also less expensive than guaranteed issue life insurance.
Traditional life insurance plans are also called fully underwritten life insurance. Underwriting is when an insurer analyzes your life insurance application to determine what your premium will be based on the policy you applied for and your health and lifestyle. A fully underwritten policy means that all the assessments required by the life insurance company, such as medical exams and testing, are completed.
Yes, you can absolutely get life insurance regardless of any pre-existing conditions you may have. However, depending on a variety of factors such as your current health, the specific conditions you have, when you were diagnosed, etc. the cost of life insurance premiums and the maximum amount of coverage you qualify for may be affected.
Those with more severe health conditions, or those with a variety of issues that negatively affect their health, are still able to qualify for simplified issue or guaranteed issue life insurance as these policies require less medical underwriting and have higher rates of acceptance.
Here is a quick overview of the top 5 no-medical life insurance plans in Canada. You can find out more with our guide here.
Interested in a No-medical Life Insurance Policy?
If you are interested in life insurance and want to know more about guaranteed issue or simplified issue life insurance, then you should consider reaching out to one of our qualified experts.
At Protect Your Wealth, we have been providing expert financial advice and helping Canadians find life insurance since 2007. We work with and compare policies and quotes from the best life insurance companies in Canada to ensure we find the right solution for you and your needs. We provide expert life insurance solutions, including no medical life insurance, critical illness insurance, term life insurance, and permanent life insurance to build the best package and give you the protection you need.
Contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an advisor today! We’re proudly based out of Hamilton, and service clients anywhere in Ontario, Alberta, Manitoba, and British Columbia, including areas such as Oakville, Abbotsford, Steinbach, and Grande Prairie.
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