Instant Life Insurance

Most life insurance companies provide instant quotes but not instant approvals. Typically, they ask you to wait four to six weeks for their decision. What if you do not want or cannot afford to wait that long?

Luckily, options exist for people who want quick access to life insurance.

Some insurers are now making the process of getting life insurance easier by offering what is called instant life insurance. With these policies, you can buy the same level of coverage as traditional policies within 1-2 days of applying. However, not everyone who applies qualifies since instant life insurance has stricter health requirements than traditional policies.

Keep reading to find out everything you need to know about securing instant life insurance.

What is instant life insurance?

Instant life insurance is a life insurance policy with accelerated approval. Where traditional plans take four to six weeks to process an application, instant life insurance policies allow you to receive an almost immediate decision after applying.

When you apply, you won’t have to undergo the medical exam, a step that traditional policies involve and that increases the processing time. However, don’t confuse instant life insurance with guaranteed issue life insurance, the small and expensive plans designed for people who are older or have health issues.

Guaranteed issue life insurance involves no medical underwriting, while instant life insurance makes use of a process called “accelerated underwriting” to determine an applicant’s insurability and premium rates. With instant life insurance, you can buy the same level of coverage as traditional plans at affordable rates.

Instant life insurance is a type of term life insurance, the best option for most people because it is so much simpler and cheaper than whole life insurance. It doesn’t include pricey features like cash value and provides coverage only for the time you need it.

How does instant life insurance work?

Applying for and buying instant life insurance is easy, quick, and painless. The entire process is online, so you do not need to worry about paperwork or speaking with an agent over the phone.

Here’s how instant life insurance works:

1. You complete and submit the life insurance application online (with a broker like Dundas Life). As part of the screening process, the application will likely contain a few simple health questions.
2. With your permission, the insurer will then review your existing medical, financial, and driving records. Based on its findings and the information provided on the application form, it will determine your insurability and, if approved, your premium rates.
3. You can expect a decision from the insurer within minutes of submitting the life insurance application.

When you apply for instant life insurance, there are three possible outcomes:

• Approved: This means the insurer doesn’t require further information to write you a policy. Once you accept the offered terms and pay the first premium, your coverage will start.
• Denied: Not everyone who applies for instant life insurance qualifies for it. These policies have stringent requirements than traditional policies, so there’s always a chance your application might be turned down. If you are not approved, consider applying for a traditional policy, which requires a medical exam and may take four to six weeks. The other option is to go for a simplified issue or a guaranteed issue policy, both of which have a quicker application process but are more expensive than standard life insurance plans.
• Asked to take a medical exam. If the insurer thinks it needs more information about your health to determine your insurability, it may ask you to undergo a paramedical exam. Of course, you don’t have to take it if you don’t want to, but in that case, your application for instant life insurance will be turned down.

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Pros & cons of instant life insurance

Instant life insurance offers faster approvals, but it is not for everyone. Knowing its pros and cons can help you decide if it is the right product for you.

Pros

• It provides coverage the same day or within a few days of applying
• It has a simpler application process and doesn’t require you to take a medical exam
• It provides the same level of coverage as traditional policies

Cons

• It provides coverage for a specific period, so is not an option for those who need permanent coverage or want to use life insurance for investment
• It has stricter medical requirements than traditional life insurance policies
• It may not be available to people aged 60 or above

Simplified Issue vs. Instant Life Insurance

Both simplified issue and instant life insurance lets you bypass the life insurance medical exam, but they are vastly different products.

Here is a quick rundown of the main differences between them.

Type of coverage

Both term life insurance and permanent life insurance coverage are available as simplified issue. In contrast, instant life insurance is a type of term life insurance. If you need a policy that lasts your entire lifetime, instant life insurance is not the right fit.

Death benefit

Simplified issue life insurance usually has smaller death benefits than fully underwritten policies. The maximum coverage available varies from one insurer to another, but many may not be willing to cover you for more than $500,000. In comparison, instant life insurance plans provide the same level of coverage as traditional policies.

Affordability

Simplified issue life insurance is costlier than comparable instant life insurance plans. That is so because, compared to accelerated underwriting, simplified issue underwriting uses fewer data points to assess risk.

Waiting period

Some simplified issue plans come with a two-year waiting period. If you die of natural causes within this period, the insurer will not pay the death benefit to your beneficiaries. Instead, it will return the premium amount paid till then with interest.

Who should get Instant Life Insurance?

Instant life insurance can be a good fit for someone who:

• Wants to buy term life insurance but doesn’t want to take the medical exam and wait six weeks or longer for approval

• Is in reasonably good health and under the age of 60

Conclusion

If you do not want to buy term life insurance the old-fashioned way — take a life insurance medical exam and then wait for 30-45 days for approval — instant life insurance is an option. You can get coverage within 2-3 days or even the same day. It has the same premium rates and coverage amounts as fully underwritten policies.

However, not all Canadian insurers offer instant life insurance and not everyone who applies for it gets approval. Dundas Life can help you find out your chances of approval and submit your application to multiple providers that write instant life insurance policies on your behalf, making it easier for you to find the best deal. Book a call with one of our licensed advisors today.

FAQs

What is Instant Life Insurance?

Instant life insurance is a type of term life insurance that provides robust coverage and faster approval at a competitive price. You don’t have to take the life insurance medical exam to get approved.

Who can benefit from Instant Life Insurance?

Instant life insurance is a good fit for someone who needs term life insurance but doesn’t want to take the medical exam and wait four to six weeks to get approval.

How quickly can I get coverage with Instant Life Insurance?

With instant life insurance, you can get coverage the same day or within one week at the latest.