Guaranteed Issue and Simplified Issue Life Insurance: Explained

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

For Critical Illness Insurance

For Disability Insurance

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

Cons

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

Cons

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

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.