Final Expense Underwriting: Simplified Issue & Guaranteed Issue
In today’s insurance market, final expense life insurance is one of the simpler types of life insurance to understand and the least complicated type of policy to get issued. The final expense market is focused mainly on the senior population with most age requirements between ages 50 to 85. Due to these age limits, the insurance carriers have relaxed their underwriting process as they understand that seniors in this range may not be in their best health.
Understanding how these underwriting approaches work is essential for agents who want to match clients with the right coverage, manage expectations, and close business more efficiently. In this article, we’ll break down the key differences, advantages, and ideal use cases for each option so you can confidently guide your clients to the best fit.
Simplified Issue Underwriting
Simplified issue is the most common form of accelerated underwriting, which does not require your client to undergo a medical exam or submit medical records of any kind. Instead, simplified issue underwriting means that your client only must answer a few “yes” or “no” health questions on an application. Your client does not need to elaborate on their answers, (unless they absolutely must by specifying in a ‘special remarks’ page of the application, or on a separate letterhead.)
The yes/no health questions are then verified through a Medical Information Bureau (MIB) prescription history check to verify the validity of the questions that were answered on the application. If there are no prescriptions in your client’s history that conflict with their yes/no answers on the application, then the insurance company will proceed to issue the policy.
An important thing to note is that not all final expense underwriting is the same. Some carriers are more lenient with certain health issues, like diabetes and COPD, while others are very strict. Just because your client was declined or rated with one insurance company, doesn’t mean that all the companies will make the same offer. Pinnacle Financial Services works with dozens of life insurance companies, so we can find something for your clients that offers an immediate death benefit, even if they’ve been turned down elsewhere. You can always contact the life team at Pinnacle, and we’ll be more than happy to help you with a client or prospect.
Now, you may think “What happens if my client is unable to get through the yes or no health questions?” or “What happens if they’re declined? Does this mean that they have no chance of getting approved for coverage?” The answer is absolutely not!
Guaranteed Issue Underwriting
If your clients still have difficulty getting through the simplified issue underwriting process, a last resort option is to go through guaranteed issue underwriting. Guaranteed issue means that they are automatically accepted regardless of any health conditions.
These plans have an automatic 2-year limited death benefit where, if death occurs in the first 2 policy years, the death benefit will return all premiums plus 10% interest. If death occurs after the first 2 policy years, then the full death benefit will be paid out. Most guaranteed issue plans offer coverage amounts that range between $5,000 and $25,000.
The limited death benefit typically means that a return of premium (plus interest) will be paid to the client’s beneficiary if death occurs in the first two policy years. If your client lives past the two year period, then they will receive the full benefit upon death.
Pinnacle Supports Life & Final Expense Agents
When it comes to final expense underwriting requirements, most people are under the impression that they will have to go through a rigorous medical examination. Therefore, it’s very common for others to be a little apprehensive before they purchase life insurance. While medical exams are still necessary to qualify for traditional life insurance, final expense underwriting is much simpler and less invasive. There are a variety of common underwriting techniques used by today’s top final expense carriers to ease said concerns.
Pinnacle Financial Services has everything covered to make sure you can get your clients in a plan that suits their needs. We offer easy-to-use final expense quoting software, streamlined life insurance enrollment tools, unique lead programs that get you in front of clients, and dedicated sales and support to help with every case. There’s no better time than now to join us at the top!
When agents partner with Pinnacle, they receive a wide variety of both simplified issue and guaranteed issue plans to fit their clients’ needs. Give us a call today to learn more about the carriers and products that offer these simplified solutions for your clients!
Mark Bolger
Agent Care Specialist – Life, Annuity, & LTC
x7705 | mbolger@pfsinsurance.com
