Guaranteed issue fits a person with serious health problems who cannot pass any health questions. Simplified issue fits a person who wants to skip the medical exam and can answer a few health questions.
Guaranteed issue vs Simplified issue at a glance
| Guaranteed issue | Simplified issue | |
|---|---|---|
| Health questions | None. | A few broad questions. |
| Medical exam | No. | No. |
| Can you be turned down | Not for health reasons. | Yes, based on your answers. |
| Price | Higher. Insurers balance risk with high premiums or low coverage. | Usually higher than a policy with a full exam. |
| Coverage amount | Often limited. New York senior graded plans max out at $25,000. | Varies by insurer. |
| Early years payout | May pay only premiums back if you die in the first couple of years. | Depends on the policy. Read the contract. |
| Best if healthy | No. New York says do not buy it if you are healthy. | Can work, but a full exam policy may cost less. |
What to know
Guaranteed issue means the company does not ask about your health. South Carolina says the company makes up for that by charging more or limiting how much you can buy. It also says some of these plans only return your premiums if you die in the first couple of years.
Simplified issue skips the exam but asks a few health questions. Georgia says no exam policies may cost more than ones with a physical. The NAIC says skipping the exam usually means higher premiums. Your answers decide if you get approved.
Try simplified issue first if you can answer the questions honestly. Go to guaranteed issue only if you are turned down or know you will be. And if you are in good health, New York says a policy with a full exam usually costs less.
- You have health issues that would get you turned down.
- You only need a small amount, like for a funeral.
- You are fine with a waiting period before full payout.
- You can answer a few health questions with a yes or no.
- You want more coverage than a guaranteed plan offers.
- You want to skip the exam but still pay less than guaranteed issue.
Common questions
Why does guaranteed issue cost so much?
The insurer takes everyone, so it charges more or caps the amount. South Carolina warns premiums can be almost as much as the insurance.
What is a waiting period?
In the first couple of years, some guaranteed plans pay back only your premiums, not the full amount. Read this part of the policy.
Is no exam the same as no questions?
No. Georgia says no exam plans usually still ask a few broad health questions. Only guaranteed issue asks none.
