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Simplified Issue vs. Guaranteed Issue Life Insurance: What Agents Need to Know

As an insurance agent, especially one working with Medicare beneficiaries and seniors, it’s crucial to understand the nuances between Simplified vs Guaranteed Issue life insurance. Both products serve clients who may not qualify for traditional fully underwritten policies, but knowing when to recommend one over the other can make a big difference in value, affordability, and the suitability of coverage.

Let’s break down the key differences between these two life insurance types. This will enable agents to make an informed decision when figuring out which is the best fit for their clients.

Simplified Issue Life Insurance

Simplified Issue life insurance offers a streamlined underwriting process that doesn’t require a medical exam. Instead, the insurer evaluates eligibility based on answers to health questions and prescription or medical history checks.

Key Features:

• No medical exam, but a few health questions are required
• Faster approval—often within days
• Lower premiums than Guaranteed Issue
• More generous coverage amounts (e.g., $25,000–$50,000 or more)
• Ideal for clients in decent health who may have minor conditions but want quick coverage

Best for:

• Seniors who can truthfully answer “no” to key health questions
• Clients who want better rates and higher coverage without full underwriting
• People planning for final expenses or supplemental coverage

Watch a quick video on how to quote Final Expense

Guaranteed Issue Life Insurance

Guaranteed Issue life insurance is a no-questions-asked policy; approval is guaranteed regardless of health history or any current illnesses/conditions. This insurance is a valuable safety net for individuals who’ve been declined for other types of life coverage.

Key Features:

• No medical exam and no health questions
• Guaranteed approval for ages typically 50 to 85
• Higher premiums for lower face amounts (commonly $5,000–$25,000)
• Includes a graded death benefit (e.g., no full death benefit if death occurs within the first 2–3 years unless accidental)

Best for:

• Clients with serious or terminal health conditions
• Individuals recently declined for simplified or fully underwritten policies
• Those needing burial insurance with an easy qualification process

Side-by-Side Comparison

Which to Recommend

• Start with Simplified Issue: If clients can pass a basic health screening, they’ll get better rates and more coverage.
• Use Guaranteed Issue as a fallback: It’s the best option when a client is uninsurable elsewhere but still wants peace of mind.
• Educate about the graded benefit: Many clients don’t realize Guaranteed Issue policies won’t pay full death benefit for 2–3 years, except for accidental death. Be clear on this to avoid misunderstandings.
• Manage expectations: Emphasize that “guaranteed” doesn’t mean better; it means last resort in most cases.

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Understanding Simplified vs Guaranteed Issue life insurance can help you serve your clients with integrity and clarity. These are valuable tools for seniors who need coverage quickly with minimal hassle, but choosing the right product depends on honest conversations about health, budget, and goals.

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As an agent, your role is not just to sell a policy; it’s to provide the most suitable product available. That starts with understanding the distinctions and guiding clients with transparency.

Life Insurance Basics for Insurance Agents

Life insurance is one of the most essential financial products available, providing financial security and peace of mind for individuals and their families. As an insurance agent, understanding the fundamental aspects of life insurance is crucial for effectively educating and assisting clients. This guide will cover life insurance basics for agents to help you decide if adding these products is right for you.

Life insurance is important financial protection that is paid upon the insured’s death in exchange for premium payments. It is a contract between an individual (policyholder) and an insurance company. This financial protection helps cover funeral costs, outstanding debts, daily living expenses, and future financial needs for the designated beneficiary.

Watch our quick YouTube video on life insurance basics

Types of Life Insurance

There are several types of life insurance policies, each one is designed to meet specific financial needs and objectives.

Term Life Insurance

• Provides coverage for a specific period (e.g., 10, 20, or 30 years).
• Offers a death benefit if the insured passes away within the term.
• More affordable than whole life insurance.
• No cash value accumulation.

Whole Life Insurance

• Provides lifelong coverage as long as premiums are paid.
• Accumulates cash value that policy holder can borrow against or withdraw if necessary.
• Premiums remain level throughout the policyholder’s life.

Universal Life Insurance

• Offers flexible premium payments and death benefits.
• Includes a cash value component that earns interest.
• Policyholders can adjust coverage amounts based on financial needs.

Variable Life Insurance

• Allows policyholders to invest the cash value in various investment options (e.g., stocks, bonds, mutual funds).
• Death benefit and cash value fluctuate based on investment performance.
• Higher risk but potential for higher returns.

See why critical illness insurance may be a good choice for your client

Some things to consider

As an insurance agent, it’s important to assess the clients’ coverage needs, financial situation and goals before suggesting a policy. Here are some things to consider:

1. Financial Needs Analysis – Determine how much coverage a client requires based on their income, debts, dependents, and future expenses.
2. Affordability – Ensure the client can comfortably afford premium payments without financial strain.
3. Policy Features – Explain policy riders, such as accidental death benefits, waiver of premium, or critical illness riders, to enhance coverage.
4. Long-Term Goals – Help clients align their life insurance choice with their retirement, estate planning, or wealth transfer strategies.

Are you an agent interested in adding life products; click here for online contract

Educating Clients

Educating clients helps them make informed decisions about life coverage. Be sure they understand all terms in simple language, provide real-life scenarios, and offer personalized recommendations.

Understanding life insurance basics helps insurance agents serve clients effectively. Knowing the types of policies, key features, and client needs, allows agents to provide tailored solutions that offer financial protection and peace of mind.

Hospital Indemnity plans

If you are a Medicare agent, it is a good idea to consider adding hospital indemnity plans to your product offerings.  In the event someone becomes ill and is hospitalized, these plans provide clients an additional layer of coverage.  Hospital Indemnity insurance provides policyholders a chance to protect their savings and lower their out-of-pocket costs.

It is important to note; when it comes to hospitalization, there are limits to what Medicare Advantage or Medicare supplement plans cover.  When that happens, a hospital indemnity plan can provide an extra peace of mind for beneficiaries.

What is hospital indemnity insurance

Hospital indemnity insurance is additional health coverage that individuals can purchase and add an extra layer of protection. These plans have a monthly premium like other insurance coverage. If the beneficiary has to stay in the hospital, they receive a fixed payment amount they can use to cover any out-of-pocket costs members incur.  Beneficiaries can use the payment to cover whatever they need such as, deductibles, co-pays, medication or for things like rehabilitation or home care expenses.

Unlike other insurance plans, hospital indemnity policies send payments directly to the policyholder.  This gives beneficiaries more freedom to choose where their money goes.  A good hospital indemnity plan should be easy to get, has no deductible or pre-certification and is not difficult to get payments from when you need them.

What hospital indemnity insurance covers

The coverage provided by a hospital indemnity plan depends on the plan chosen and the riders added.  We have listed a few basic things these plans cover below.

1. When a beneficiary has a hospital stays weather or not surgery takes place.
2. If they are confined in an ICU (intensive care unit).
3. In the event they are confined in a CCU (critical care unit).

Additionally, there are plans that offer coverage of all or some of the items listed below.

1. If a beneficiary has medically necessary outpatient surgery , as opposed to an elective outpatient surgery.
2. If they require outpatient diagnostic imaging procedures, x-rays or lab procedures.
3. Some plans include payments for ambulance services.
4. There are plans that event pay for emergency room visits or specific doctors office visits (not routine annual checkups).

Waiting periods for benefits

In most cases, there is a 30 day waiting period for illnesses that result in a hospital stay.  The waiting period varies by carrier and the plan chosen.  However, some plans will not have a waiting period for hospitalization for an accidental injury. It is important that enrollees understand all benefits of their plan choice, including waiting periods, before they decide on a policy.

Hospital Indemnity plan cost

Hospital indemnity plans charge a monthly premium like any other health insurance. The cost depends on several factors including the plan & company choice, as well as age, gender and location.

It is important to consider if hospital indemnity insurance is worth getting or not.  The beneficiary needs to consider what their current health plan covers, their out-of-pocket cost including deductibles and co-pays and co-insurance and the cost for an average hospital stay.  They also have to take into account their personal financial situation and if they can better afford the coverage or payment for the out-of-pocket expenses.

Opportunity for cross sales

Hospital indemnity plans provide a great opportunity for Medicare agents to make a cross sale.  Many of your current clients could benefit by purchasing one of these plans. Clients who enroll in a Medicare advantage plan without a premium ($0) may want to add an affordable hospital indemnity plan that adds that extra layer of protection. Their Medicare advantage plan may leave them paying high co-pays or deductible for a hospitalization. Be sure to go over their budget and possible value of adding the coverage.

Agents should go over the average cost of a hospital stay and the possible out-of-pocket cost as compared to the cost of adding a hospital indemnity plan.  Do the Math for them.  Make sure it is a viable option before they sign up.

Are you an agent who wants to offer these plan to your clients; click here for online contracting.

Rules for hospital indemnity insurance sales

It is important to remember, there are rules to follow when you offer a hospital indemnity plan to a client.  Agents cannot mention this or any other product at a Medicare appointment if it is not included on the scope of appointment.

Watch a YouTube video on the scope of appointment rules.

Final expense life insurance

Because the costs for funerals can add to the stress of losing a loved one, Final Expense life insurance may be a good choice to provide financial relief for your client’s family. Crowe and Associates offers agents contracts with several of the top final expense carriers who offer level, graded and guaranteed issue types of plans.

Final expense carriers

Crowe is contracted with top Final Expense carriers in all 50 states.  A few of the carriers we offer are: AIG, Foresters, Mutual of Omaha, TransAmerica, Cigna, Baltimore Life, Columbian Life, Royal Neighbors, and Gerber.  We offer agents the best rates for all types of FE plans.  Plan types include, single pay, level and graded as well as guaranteed issue.

Free quote site

Crowe agents have access to a free web-based quote site.  This site can quickly quote and compare final expense plans.  Just add in some basic information (state, age and desired benefit amount) and see plan costs and benefits side by side.  Additional information: our quote site is powered by FEX Quotes.

Watch a quick YouTube video on how to quote Final Expense and Medicare Supplements

Quote all carriers in one place

We give our agents access to a quote site that quotes all final expense plans we offer at no cost.  This includes immediate death benefit plans, graded plans and guaranteed issue plans.

Choose the carriers you want to start with

It is usually a good idea to start with a few carriers. The cost of a policy is a good place to begin, however, many plans ask beneficiaries underwriting questions. It is important to consider your client’s health and their ability to pass underwriting.  You may want to contract with a well-priced immediate death benefit carrier and a couple well priced GI issue companies.

Take a look at our product guide to see which companies you may want to start with.  The product highlight sheet provides plan benefits for several companies that include; maximum face value, commissions and underwriting.

Click here to view our FE highlight sheet. 

Contracting

Because many carriers are “same time contracting” you don’t have to wait for your contracting to be processed before you write a policy. Once you submit your first application, the carrier processes your contract.

Click here to join the team at Crowe.

Crowe agents who want to add Final Expense carrier to your existing contracts – click here.

Commissions

Many of the carriers we contract with offer starting commissions of 115%.  Some carriers offer advance commission payouts for agents with good credit.  All our agents receive both new and renewal commission payments directly from the carrier.  In other words, our agents own their own book of business.  Agents have access to all carrier incentive programs.

Contact our office for a username and password to start quoting today.

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Medicare sales and cross selling

If you are selling Medicare, you should think about how to meet all the coverage needs of your clients. That is why Medicare sales and cross selling go hand in hand.  Before you try and do this, be sure you have the necessary product knowledge on anything you intend to offer.

A great way to get insight into your client’s potential needs is with a client needs assessment.  Each agent should tailor the assessment to include the applicable product lines they are licensed to sell and have a good knowledge of.

If your client understands that you are able to offer them coverage for all their personal insurance needs, they will be inclined to call you when they decide to add to their current coverage.  It is best to take care of their most urgent concerns before talking about additional items.

Watch our quick YouTube video on cross selling during AEP

Medicare sales cross selling – be aware of underlying health issues

If you conduct a needs assessment or spend enough time speaking with your client, you will probably find out if your client has any illnesses that will prevent them for obtaining some types of coverage that they will not qualify for.  If you ask about any recent claims they have had, this may be an indicator if they are a good candidate for some types of coverage.

Some other things to find out from your client

Is the client or their spouse presently working?  If the answer is yes, do they have any employer benefits and if so, what are they?

Have they ever served in the military (are they a veteran)?  Sometimes veterans receive benefits.  You need to find out if they do and what those are.

Medicare sales cross selling – Cancer, Heart attack and Stroke coverage

Because many people have a family history of either cancer, heart attack or stroke, this product is not difficult to sell. This product is sometimes called critical illness insurance.  Be sure you understand the client’s budget before you show them quotes from companies that will fill their coverage need.

Cross selling – Long Term Care Insurance

Most people do not have long term care coverage. Although LTC has changed over the years, there are still some good coverage options available.  There are some short-term care policy options that include home health coverage.  There are also some life policies that include an optional LTC rider.  You can ask your client if anyone in the family has needed home health or nursing home care. If they have, ask them if they know how it was paid for. Do they have a way to pay for it if they need it?

Cross selling – Life Insurance

Life insurance is not like LTC coverage because many clients have at least some life insurance coverage.  If you want to start a discussion about life insurance, you need to find out if the client already has coverage and if so, how much.  Once you get the answer, you can ask questions to determine if they have enough to cover what they need it for.

Here are some reasons people purchase life insurance:

To replace income lost due to the death of a family’s financial provider.

If they want to cover their final expenses.  If they have a policy in place, it may not be enough to cover their final expenses.  This means they may want to consider purchasing a policy that provides a bigger benefit amount.

Policies can help pay any outstanding debts owed by the policy holder.

In some cases, the policy holder wants to leave a financial gift to their chosen beneficiary.

If they do not have a policy, you may be able to help them decide if a policy could benefit their loved ones.

Cross selling – Final Expense

Final expense insurance is a kind of life insurance.  If the client does not have life insurance in place, this type of policy can help family members pay for their final expenses and avoid leaving them with a large bill after you are gone.

Cross selling – Annuities

These days many people want a safe place to invest their savings due to low interest rates at banks and stock market volatility. Simply ask your client if they are happy with their current rate of return on investments. Let them know a fixed indexed annuity can provide a dependable place to invest savings and a better return rate than many CDs.  In many cases, you can offer them an annuity product that will provide a better return that what they currently have.

Now that we have given you a few products to consider adding to your portfolio, it is up to you to decide what will be the best value add.

Click here to contract with Crowe or add carriers to your current contract

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 Life Insurance Myths

Life insurance is not required by law like many other types of insurance, and many people choose to forgo these policies. However, it can be an extremely valuable investment in your financial health and that of your family. Let’s clear up some of the life insurance myths.

Only the elderly need life insurance

Life insurance policies are more affordable for younger applicants!  Don’t be fooled by this mythIt makes the most sense to purchase earlier rather than later. Many term life insurance policies are also made with the option to be rolled over into whole life policies once the beneficiaries are older.

It’s too expensive

Polls show us that this myth is so pervasive that over 50% of people overestimate the cost of life insurance. Just like with other types of insurance, policy cost is determined based on age, driving record, health, gender, etc. so there is a lot of variation in plan premiums. There are many affordable options for life insurance that can fit your budget.

If you don’t work outside the home, you don’t need it

Life insurance policies aren’t just about covering lost wages.   That is one of the life insurance myths.  They’re about being able to replace critical work, including domestic work. A stay-at-home parent can be a driver, tutor, cook, day-care, cleaner, and babysitter that goes uncompensated. If that person were to pass away unexpectedly, all of those roles would have to be replaced and compensated.

I have group life insurance – that’s enough

Some people get group life insurance through their work. But what happens if they’re laid off, or the company goes under? In addition to that risk, many employer-provided policies offer only several thousand worth of coverage, which wouldn’t put much of a dent in more than funeral costs.

Personal savings is the same thing – life insurance myths

Personal savings can be a great thing to have, but it is not the same as a life insurance policy. For one thing, personal savings can often be easily drained with one unexpected hospital stay. For another, there is no need to limit the amount of support a family receives after the death of a loved one. The more financial support there is, the fewer things there will be to worry about during that difficult time.

I can’t buy life insurance with my pre-existing condition

Do not fall prey to this life insurance myth.  If the pre-existing condition is minor or the beneficiary is managing the condition with medical treatment, there are many policies to choose from that will simply charge slightly more for coverage despite that condition. There are also guaranteed issue policies, which guarantee coverage without any disclosure of medical history or exam, meaning that they will be more expensive, but provide the coverage regardless of pre-existing condition.

Life insurance can be a powerful tool in planning for the financial security of a family, and it’s helpful to understand exactly what it is and what it can do before making any decisions about it.   Don’t let any life insurance myths confuse you.

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How to Get Life Insurance with Pre-existing Conditions

There are a lot of misconceptions and myths about life insurance, even among people who are otherwise informed about the insurance industry. One of these recurring myths is that people with health issues or pre-existing conditions cannot get life insurance policies because of those conditions. This is not the case. While having a pre-existing condition does make it often more difficult and more expensive to get life insurance, there are policies out there designed to cover people with this experience. There are several factors to consider:

Which Pre-existing Conditions Matter for Life Insurance?

How much a pre-existing condition will affect the price or availability of the life insurance policies depends on several factors. One of those factors is severity. If a person is otherwise healthy, they will likely have multiple options to choose from at more competitive prices. If the pre-existing condition significantly impacts their daily function, however, they may have fewer policies to choose from and the prices will likely be higher. Term life insurance policies may not be an option for those dealing with more severe conditions. The following conditions have a high impact on insurance premiums:

• Cancer

• Diabetes

• Epilepsy

• Heart disease

• HIV

• Obesity

• Smoking or tobacco use

The following pre-existing conditions have a low impact on premiums:

• Anxiety

• Asthma

• Depression

• High blood pressure

• High cholesterol

• Sleep apnea

How to Shop for Policies

There are several things people with pre-existing conditions can do to make their policy options greater. One of those is to manage their health condition. Any documentation of effective treatment could help them secure a lower premium on a life insurance policy. Additionally, working with a broker or insurance agent can be helpful, as they know the ins and outs of the industry and can work on finding a policy for the client’s unique needs. Lastly, buying life insurance sooner rather than later can be vital. As people age, and as their health worsens, premiums go up significantly, even for people without pre-existing conditions. There are many options out there, and one need only look in the right places.

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Life Insurance vs. Annuity

Which is Right For You? Although both life insurance and annuities are very different, they can both play a role in providing financially for individuals and families as they age and retire. Here’s the quick version:

Life Insurance

Life insurance is an insurance policy that pays out to the chosen benefactor at your death. It can provide income for loved ones and cover final expenses such as medical bills, funeral costs, and even help clear debts. There are two common types of life insurance: term life insurance and whole life insurance. Term life insurance is more affordable, with lower premiums, and has an expiration date, which is typically 10, 15, 20, or 25 years after enrolling. Whole life insurance is just that, for the person’s whole life until death.

Annuity

Annuities are also a type of life insurance, but with a different structure. Instead of a death benefit, an annuity provides payouts over your lifetime. Because of this, it provides guaranteed lifetime income. There are also two types of annuities: immediate annuities and deferred annuities. Immediate annuities are contracts purchased with a one time payment to the insurance company and provide payments to you within the first year of purchase. Deferred annuities provide payouts that start at a future date instead of within the first year of purchase.

Which is Best For Me?

That depends on your situation. You’ll need to ask yourself the following questions:

• Is a steady income in retirement something I want or need? If so, an annuity may be right for you.

• Do you have loved ones that need to be provided for after you die? Life insurance is designed to do that.

• Or, do you want to provide both forms of financial support – steady income in your later years and a death benefit for your loved ones? If so, it may be best for your situation to include both life insurance and an annuity, either immediate or deferred, in your financial planning.

Talking to a licensed financial advisor would be a good next step for anyone considering either life insurance, an annuity, or even both.

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Myths About Life Insurance

Life insurance is one of the most misunderstood types of insurance policy.  Misconceptions and partial truths circulate in the public imagination. Here are the top five myths about life insurance, and the real information:

It is Expensive

Many people are surprised by how affordable term life insurance can be. Price policies vary from person to person, which is why people are encouraged to shop around when they apply. Different companies may offer different costs for a plan. But, the average yearly cost of a $500,000 policy (20 year term) for a 30 year old female is $252 a year. That calculates out to less than $25 a month.

Only the Elderly and Parents Need Life Insurance

Another common misconception: the beneficiary of a life insurance policy does not have to be a child. Parents are not the only people who need life insurance.   Partners can be beneficiaries, as well as anyone else who depends on the policyholder. And, the sooner one applies for a policy, the cheaper the policy is likely to be. The one factor that determines how much the policyholder pays is their health; health is likely to decrease as a person ages.

It’s Difficult to Apply for Term Life Insurance

Like many other things, the internet has changed how people apply for term life insurance. In the past, people may have needed to see a doctor in person to qualify for term life insurance policies. With the rise in telehealth accessibility, the vast majority of companies have ways of applying for policies over the phone or online.

My Employer Offers Me Enough

For those people who have access to a life insurance policy through their work, the coverage is still likely to not be enough for their family. The median workplace life insurance policy is approximately one year’s salary. It is best to consider workplace life insurance a supplement to a life insurance policy rather than the entirety of the coverage. Online tools exist to calculate how much coverage your family may need, but one guideline is to aim for five to ten times the policyholder’s annual salary.

I Only Need Life Insurance If I’m Working

Even if a policyholder isn’t employed outside the home, the value of the labor they provide in the home is enough reason to consider a life insurance policy. Despite life insurance typically being thought of as a replacement for lost income, it can be vital to pay for childcare or housework, especially if the policyholder is the one performing those tasks now. Plan coverage with all of the family’s contributions in mind, not just working benefits.

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Single Premium Life Policies

The primary benefit of life insurance is to leverage money to create an estate.  This benefit can provide for survivors or to leave something to an organization or charity. Single premium life policies  (sometimes called SPL) are a type of life insurance.   In this type of policy you pay a lump sum of money into a new policy in return for an instant death benefit.  This policy is guaranteed to remain paid-up until death. There are many different versions of single pay policies available. These policies offer a wide range of investment options as well as withdrawal provisions.

With single-premium life policies –

The cash you invest applies immediately.  In Fact, this enables the policy full funding. The size of the death benefit depends on the amount invested, insurance company used, type of underwriting, age and health of the insured.  With these policies, a younger person is normally has a longer life expectancy.   This gives the funds you pay for the premium more time to grow before the insurer expects to pay out the  death benefit. The larger the amount of money you initially contribute to your policy, the greater your death benefit will be.  For example, a 65-year-old female might use a $25,000 single premium to provide a $55,000 income-tax free death benefit to her survivors/beneficiaries.  Whereas a 50-year-old male’s $100,000 single premium might give a $400,000 death benefit.

Many companies have provisions in the policies which allow for a partial withdrawl of cash value in the event that you need money. Other policies guaranteed a full refund of cash value at a certain point (often 6 years ).  A policy can always be surrendered for cash value but policies surrendered prior to maturing may have surrender charges.  Single premium plans should not be used with money that you may need to spend or to live off of.  If you have a lump sum of cash that you don’t need right now and you want guaranteed life insurance protection for your family or your favorite charity, single-premium life insurance can be an ideal solution.

However you choose to use a single-premium life insurance policy, remember to consider your personal financial situation.  You also want to think about other retirement vehicles already in use.   This way you can select and shape your policy to best match your needs.