We can categorize life insurance policies by the application procedure. There is definitely a trade-off here though – the ‘easier’ the application process appears to be, the more limited the policy benefits tend to be. The general categories are:
There is no medical underwriting. Policies are issued based simply upon the application.
Drawbacks: These policies are generally small amounts of whole life insurance and importantly, only provide coverage for accidental death (deaths due to medical conditions are not covered) in the first two years of the policy.
These policies ask a series of yes/no questions that the consumer answers on their own. If the consumer answers all the questions ‘no’, then the policy is issued.
Drawbacks: These policies often have limited coverage amounts, and in the case of term life insurance, are not generally ‘renewable and convertible term’ (the term policies are not renewable and/or are not convertible). Even the government suggests these are features you should care about.
From the Financial Services Commission of Ontario:
“If you start with a term policy, you may want to make sure it’s renewable or convertible into a permanent policy at a later date. That way you have some flexibility to meet your changing life situation.”
Source: https://www.fsco.gov.on.ca/en/insurance/life/pages/policy-types.html
Many term policies offered online are simplified issue, and thus, are not renewable and convertible. By contrast, all term life insurance policies available online from The Term Guy website are renewable and convertible.
There’s another less obvious drawback as well. Because you are answering the questions yourself, you are effectively self-underwriting. Should you die and a claim is filed, it’s at that point that the life insurance company will review your application and verify the validity of the questions. If you answered a question incorrectly – even inadvertently, and even if the question is not related to how you died – you are at increased risk of having your claim denied. And because you’re now deceased, there’s no opportunity to correct the problem.
These policies involve an underwriter reviewing your medical data prior to the policy being issued. Because your history is individually reviewed, these policies tend to have the best policy features and the lowest premiums available. And because your medical history was reviewed prior to the policy being issued, there’s less opportunity for your claim to be denied. Term policies offered on The Term Guy website are fully underwritten policies.
Drawbacks: Fully underwritten policies are not ‘instant issue’ policies. The time frame from application to policy issue is commonly 10 days to 2 weeks as an underwriter must individually review your medical data.
We strive to recommend the best term life insurance policies available in Canada. In order to accomplish that, we offer term life insurance policies that are renewable for life, convertible to age 71 and have some of the lowest premiums from similar fully underwritten policies available in Canada (and they are often the actual lowest premiums). The trade-off is of course a process that takes a bit longer than a simplified issue policy. As professional life insurance advisors, we recommend that this is a trade-off you should make. A bit of time upfront will provide you with a better-featured policy, at cheaper premiums.
Good news – in years past a fully underwritten policy generally required an in-person visit from a paramedical person, along with blood and urine samples. Today, the application process is much simpler than it was.
The application process:
1) Complete the application form online here. We submit it immediately to the life insurance company.
2) A medical professional will contact you by phone to conduct a medical history interview. This call will take about 15-20 minutes.
3) The policy is issued and delivered to you by email.
A medical professional will call you during the time frame you selected when you completed the online application. The call will simply be a series of questions that you should respond fully to.
This is not a test – it’s a disclosure of your medical history. There is no right or wrong, it’s simply data you are providing to the underwriter. Consider it a ‘data dump’ where you transfer your medical history over to the insurance company.
During the medical history call, listen to the questions carefully and answer the questions as asked. This seems obvious, but it’s not. Avoid interpreting the questions as ‘do you have anything wrong with you’, which will not be what they’re asking you.
Example medical question:
Have you ever had any tests, investigations, injury, treatment, or surgery on your eyes?
Many people will automatically answer this question ‘no’. That’s the wrong answer! I know I mentioned that there’re no wrong answers, but if there is, ‘no’ is certainly it. When you say ‘no’, you’re actually interpreting the question as ‘is there anything wrong with your eyes?’ – not the question that was asked.
Read the question again. There are actually 5 sub-questions – tests, investigations, injury, treatment or surgery. Even if your eyes are perfect, you likely have had tests – and these should be disclosed. A better answer would be (assuming the following is true for you):
I have my eyes tested every two years and have no problems.
Or
I have my eyes tested every two years. I wear glasses for distance vision. Otherwise, I have no known concerns.
There are two benefits from this level of detail. First, as we’ve already implied, providing full details during your interview can ensure that in the event of your death, your claim is paid promptly and cleanly. Secondly, underwriters have some leeway in their decisions and a fully detailed medical history predisposes them to offer cheaper and better policies to Canadians.
One last tip: as companies have moved from requesting in-person medicals and blood and urine tests, they now will frequently request a report from your family doctor. Doctors can be a bit slow in providing these reports. Delays by doctors will delay your policy as well. To speed things up, you may consider sending your doctor an email with a brief note that ‘I’ve applied for life insurance and expect they will want a report from you. Just a heads-up.’. Doctors then see the report as a service to their clients and will often expedite it – and thus expedite your policy.
225 Eby Crescent
New Hamburg, Ontario
N3A 1Y9
+1(866)-799-1499
Policies are underwritten by Wawanesa Life Insurance, a Canadian life insurance company rated A Excellent.
The Term Guy is a licensed life insurance agency serving residents of Ontario (Lic #37992M), British Columbia (Lic. #LIC-2021-0030559-R02), and Alberta (Lic. #5-11247944-2021).