Which statement correctly describes simplified issue life insurance?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Simplified issue life insurance is designed to streamline the underwriting process: it does not require a medical examination, and underwriting is based on a short application with a limited set of health questions and, in some cases, external database checks. It falls between guaranteed issue (no health questions, higher premiums, often graded benefits) and fully underwritten coverage (medical exam, APS, lab work). Because underwriting is less complete, simplified issue policies generally carry higher premiums per dollar of coverage and lower maximum face amounts than fully underwritten policies.
Why the other options are wrong
- B) A full paramedical exam and attending physician statement describe fully underwritten coverage, not the simplified process.
- C) Simplified issue does not guarantee every applicant coverage — applicants may still be declined based on the limited health questions — and it is not always the full benefit structure of guaranteed issue.
- D) Simplified issue products are commonly sold on an individual basis to a wide range of buyers, not only to employees of large employers.
Memory hook
Simplified issue = short form, no exam, quick answer. Light underwriting, higher price, lower limits.