When shopping for Final Expense insurance (often called "burial insurance"), you will encounter two main types of applications: Simplified Issue and Guaranteed Issue.
Both are designed for seniors and require no medical exam. However, the difference in cost and coverage is massive. Choosing the wrong one could mean paying double the premium—or leaving your family with no payout at all if you pass away too soon.
1. Simplified Issue Life Insurance
This is the "standard" option for most seniors who are in reasonably good health.
- The Application: You answer a series of health questions (e.g., "Have you been hospitalized in the last 2 years?", "Do you have cancer?", "Do you smoke?").
- The Check: The insurer runs a background check on your prescription history (Rx check) and MIB (Medical Information Bureau) file to verify your answers.
- The Benefit:
- Immediate Coverage: Coverage starts the day you are approved (Day 1). If you die next week, your family gets the full check.
- Lower Cost: Because you answered health questions, the insurer takes on less risk, so premiums are lower.
Who is it for? Anyone who can answer "No" to major health questions. Even with controlled conditions like high blood pressure or diabetes (controlled by pills), you can usually qualify.
2. Guaranteed Issue Life Insurance
This is the "last resort" option for people with serious health issues.
- The Application: There are zero health questions. You cannot be turned down for health reasons, as long as you are within the age limits (usually 50-85).
- The Benefit:
- Waiting Period (Graded Benefit): This is the catch. Almost all Guaranteed Issue policies have a 2-year waiting period. If you die from natural causes in the first 2 years, your family receives only the premiums you paid back (plus a little interest, usually 10%). They do NOT get the full death benefit.
- Higher Cost: Because they accept everyone (even people on their deathbed), the premiums are significantly higher.
Who is it for? Only for people who have been declined for Simplified Issue due to serious conditions like terminal illness, current cancer treatment, organ transplant, or dialysis.
The "Checkmate" Chart
| Feature | Simplified Issue | Guaranteed Issue |
|---|---|---|
| Health Questions | Yes (10-20 questions) | None |
| Medical Exam | No | No |
| Coverage Starts | Day 1 (Immediate) | After 2 Years (Usually) |
| Cost | Moderate | High |
| Max Coverage | Higher ($50k+) | Lower (usually ~$25k) |
The Golden Rule: Try Simplified First
Never start by applying for Guaranteed Issue. Always try to qualify for a Simplified Issue policy first. Why?
- It's cheaper.
- You are covered immediately.
- Even if you have health issues, many Simplified Issue carriers have "graded" plans that are still better than Guaranteed Issue.
Only accept a Guaranteed Issue policy if you have been turned down by multiple carriers and have no other choice.
Application Checklist
- Gather your med list: Know exactly what prescriptions you take. The Rx check is how they verify your health.
- Be honest: If you lie on a Simplified application, the insurer can contest the claim later for fraud.
- Check the Waiting Period: If you buy Guaranteed Issue, ensure your beneficiary knows about the 2-year rule.
Protect your family without breaking the bank. See which final expense plan you qualify for.