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I'm planning to buy term life insurance. I'm in my mid thirties and my wife is in her mid twenties; no kids but we may have one in the next two years. Both of us are relatively healthy, aside from minor issues.

My question: a lot of the insurance companies offer what they call "simplified term life", "instant issue term life", etc. This apparently means that you just fill out a basic application and you get the policy, without them looking closely at your health, etc. Relatively painless to buy.

That sounds appealing to me, because I have a demanding job and I'm very busy. But will I get a worse rate if I choose "simplified term life"? Or is there some other drawback to doing it the quick way?

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    You should be able to get quotes both for the simplified and for the policy with an exam (both preferred and select). Call a broker and ask for quotes, or look at the online quote sites. 20-30 minutes online or on a phone call can save you a fair amount of money. – bstpierre Apr 6 '11 at 1:33
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If you expect to get the lowest rates for insurance with a more detailed underwriting process, then you'll get a worse rate going for the simplified term life. It's a bit like group insurance policies. Everyone in the group gets the same rate, so the people less likely to "cash in" get a worse rate than they "should," and the people more likely to cash in get a better rate than they should.

More information here.

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I recently considered buying term life through either my company plan or through a large carrier that required an exam. Since it was the same carrier, I figured this would be a good apples-to-apples comparison.

The company plan offered group coverage with no exam and payroll deduction. If I went to the carrier directly, they offered much more insurance for slightly more money.

Their highest rate was when you were going for the "simplified" that you described. It is the highest premium because they will assign you to a higher risk pool. People who go for the simplified usually have a habit or condition that makes the insurance company nervous.

You could take a test and get assigned to the "preferred" or "select preferred categories."

The couch-potato coverage was called "preferred," but with the test my spouse and I qualified for "select preferred" because our cholesterol was in a normal range, we were non-smokers, and filled out the questionnaire (which included a medical history). They also checked our DMV records.

They will sent an EMT to our house for an appointment of our choosing. For the much better rate, I would say it is worth a late breakfast, a vial of blood, a BP reading, and a urine sample. Time: about an hour. Savings: $1760 (= $176/year * 10 year level).

You may be able to get an even better rate for a multi-policy discount, if your carrier is the same as your auto and home.

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