Whether it’s your first time buying life insurance, or you’ve been browsing for a while, you’ve probably come across a few different options for applying for either term or permanent life insurance. Here’s what you need to know about the difference between the different types of life insurance: fully underwritten, simplified issue, and guaranteed issue life insurance.
What Are My Life Insurance Options?
While looking for life insurance, you’ll commonly come across three types of life insurance: fully underwritten, simplified issue, and guaranteed issue. Each has their pros and cons, and are designed for different situations and needs. Fully underwritten and simplified are for term life insurance and permanent life insurance, whereas the guaranteed issue is typically only for permanent life insurance, aimed to cover your whole life.
What is 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 an electrocardiogram
The results for these tests and samples typically take a few days to sometimes a few weeks, which is why this process takes the longest to get approved for. However, if you have exceptionally good health, you might qualify for an even better premium rate than the one you were quoted.
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 which has resulted in several options for approval with no medical tests. The COVID-19 pandemic in 2021 significantly impacted the life insurance underwriting process as companies expanded their no medical limits. Although deemed temporary measures, many expect these accelerated underwriting guidelines to remain permanent.
As of 2021, the following limits are available with no fluids: