Term Life Insurance: Quick Approval Process Explained

The approval time for term life insurance depends on the type of policy and the company providing it. The process can be completed in as little as 24 hours or take up to a few weeks or months. Instant life insurance policies are available from some insurers, offering decisions within minutes. Traditional policies can take up to two months to be approved, but non-medical policies can be obtained in as little as 24 hours. The length of the approval process is influenced by factors such as health, lifestyle, and medical records.

No medical exam life insurance

There are three types of no-exam life insurance policies: accelerated underwriting, simplified issue life insurance, and guaranteed issue life insurance. Each type has its own benefits and limitations. Accelerated underwriting policies use data provided by the applicant, as well as third-party data and algorithms, to determine coverage eligibility. Simplified issue life insurance involves a short application and does not require a medical exam, but tends to be more expensive than accelerated underwriting. Guaranteed issue life insurance does not require a medical exam or health questions, but offers very limited coverage and is significantly more expensive.

The cost of no medical exam life insurance is typically higher than that of traditional life insurance due to the increased risk taken on by the insurer. The approval process for no medical exam life insurance can be completed within 24-48 hours or may take up to a few weeks, depending on the company and the information required.

Simplified issue life insurance

The application process for simplified issue life insurance is much shorter than that of a standard life insurance policy, which can be exhaustive and span multiple pages. Simplified issue policies only ask a handful of health-related questions. This makes it a good option for those who don't want to deal with a medical professional or are worried that an exam will reveal an underlying health problem.

However, because insurers have limited information about applicants, they won't offer large coverage amounts. Many companies cap coverage at $40,000 to $50,000, and some policies only pay the full death benefit if the policy has been active for at least two years.

• Don't want to take a medical exam
• Can't wait weeks or months for coverage
• Are in poor health and worry they won't qualify for a reasonable premium with traditional underwriting

Fully underwritten life insurance

A fully underwritten life insurance application requires a medical examination, typically administered by a nurse. The exam includes blood pressure readings, urine and blood samples, height and weight measurements, and a medical questionnaire. In some cases, an EKG may also be part of the medical examination, especially for older applicants or those seeking high-value policies.

The underwriting process can take as little as 24 hours or as long as several months, depending on various factors, including the applicant's health and lifestyle. The more positive the results, the lower the premium.

Fully underwritten term life insurance provides coverage for a specific period, typically between 10 and 30 years. During this time, the insurance company pays a benefit to the beneficiaries if the insured person passes away. These policies are ideal for homeowners and those starting or planning to start a family. They tend to have higher coverage amounts than other types of life insurance due to their temporary nature and the requirement to pass a medical exam.

Compared to no-exam policies, fully underwritten policies offer several advantages, including lower premiums, higher coverage amounts, and more comprehensive information for the insurance company to assess risk accurately.

Instant life insurance

The three possible outcomes of an instant life insurance application are:

• Approved: There was nothing in your application that made the insurer hesitant to cover you. Once you agree to the policy and pay your first premium, your coverage will go into effect—often on the same day.
• Denied: You may not qualify based on factors like your health, lifestyle, or age. In this case, you can apply for a traditional life insurance policy or a guaranteed issue policy, which does not require a health questionnaire or medical exam.
• Referred to an underwriter: The insurer needs more information about you before making a decision and will send your case to a professional underwriter to evaluate your risk.

Annual renewable term life insurance

With annual renewable term life insurance, you can lock in your rate for a year at a time, and the initial price is usually low. However, the cost will likely increase every year, and you may end up paying more than you would with other types of life insurance. The policy's face amount, or the benefit paid if you die, remains the same.

The maximum age for annual renewable term life insurance varies by state. For example, the age limit is 80 in New York.

Compared to level term policies, which have a premium rate that remains the same for a specified number of years, annual renewable term insurance is a less common type of term life insurance. Level term policies may have a term of up to 30 years, while annual renewable term policies are limited to one year.

Frequently asked questions