Simplified issue life insurance

Summary: Simplified issue life insurance applications ask a few questions but have no exam. If you answer yes to any of the questions you’ll likely be declined. Questions vary by company but can include topics such as:

• Do you smoke?
• Do you reside in a nursing home?
• Are you currently receiving health care at home?
• Have you ever tested positive for HIV or been diagnosed with HIV?
• Have you ever tested positive or been diagnosed with Alzheimer’s or dementia, cirrhosis, emphysema or chronic obstructive pulmonary disease (COPD)?
• In the past 24 months have you been diagnosed as having or advised by a physician to have treatment for cancer (other than basel cell carcinoma), heart attack, stroke or TIA (transient ischemic attack), alcohol or drug abuse?

What to know: Simplified issue policies are usually less expensive than guaranteed issue life insurance, but still pricey. You generally won’t be able to buy a lot of coverage this way. The maximum policy amount might be $500,000 or much less, depending on the company.