Simplified Issue vs. Fully Underwritten Mortgage & Life Insurance

Written by Buy Mortgage Protection

Almost all mortgage protection insurance companies sell simplified issue insurance policies as their primary product. If you received a mortgage protection letter in the mail, this likely came from a multi-level marketing (MLM) insurance company. These policies allow the customer to get coverage quickly, and get the insurance agent paid immediately.

The downside is these policies are more expensive for healthy people, or people with minor health conditions such as high blood pressure, thyroid issues, and those who are only slightly overweight.

If you are in good health and could qualify for a “standard” health rating policy, but were sold a simplified issue policy that goes up to Table 4, your insurance premium is likely to be double what it should be.

Most mortgage protection insurance companies and agents sell insurance policies that automatically go up to Table 4 (a 200% increase over a “standard” policy rating) as their primary product. View this article for more information about life insurance table ratings.

Why would your mortgage protection insurance agent do this?

Most mortgage protection agents selling for insurance companies pay for their leads. That mortgage protection letter you sent in with your personal information is called a “lead,” and it will be sold to one or multiple insurance agents. That telemarketing phone call, where you answered and gave them your personal information about your mortgage, is now called a “lead,” and it will be sold to one or multiple insurance agents.

Your personal information is literally for sale!

Because your information is sold for anywhere from $1 up to $50 (depending on how old your “lead” is) to an agent, this increases the insurance agent’s costs of doing business. And because time is money, many insurance agents will push simplified issue policies on you, regardless of whether you are healthy, or unhealthy.

Fully underwritten policies take more time for an insurance agent to process, submit, and monitor; this process often takes up to 60 days. Fully underwritten policies do, however, get you the best pricing.

Simplified issue policies, on the other hand, are typically approved within days, or a week or two.

It is much less work for the insurance agent to write simplified issue policies that go up to Table 4. They are more expensive for the homeowner, so the insurance agent gets paid more commission for each sale. The homeowner gets approved quickly, but may be paying twice as much as they should for a mortgage protection policy.

For the insurance agent, it has a 100% win (quick issue & higher pay), and the homeowner only gets a 50% win (quick issue & overpaid).

Most mortgage protection insurance companies place more emphasis on agents writing simplified issue, versus fully underwritten mortgage protection policies. Many mortgage protection insurance companies even cut the commission percentage in half if an agent writes a fully underwritten policy versus a simplified issue policy. By doing so, the mortgage protection company discourages the mortgage protection agent from helping families get the most affordable mortgage protection possible.

What do we do differently?

To get the best rates for our clients, we will help you with fully underwritten insurance policies. This means you must submit a blood and urine sample, but you will get the best rates available in the insurance industry by doing so.

Because we do not funnel our clients into specific insurance carriers, we have more options available than simplified issue policies and fully underwritten policies.

We also have access to insurance companies that will issue insurance policies on a simplified basis up to standard and preferred health levels (versus a table 4 simplified issue policy), without a medical exam. This gets you the best mortgage protection rates, without having to do a blood and urine test.

Here are how rates would differ with different insurance companies and health conditions for a 40-year-old male.

Insurance CompanyNon-MedicalTable RatingClient AgeTermFace AmountMonthlyYearly
Company AYesTable 44020 Years$250,000$84.32$997.00
Company BYesStandard Non-Tobacco 4020 Years$250,000$34.79$404.58
Company BYesPreferred4020 Years$250,000$21.97$255.44
Company BYesSelect Preferred4020 Years$250,000$17.97$208.30

Here are how rates would differ with different insurance companies and health conditions for a 60-year-old male.

Insurance CompanyNon-MedicalTable RatingClient AgeTermFace AmountMonthlyYearly
Company AYesTable 46020 Years$250,000$442.46$5,127.00
Company BYesStandard Non-Tobacco 6020 Years$250,000$204.01$2,372.72
Company BYesPreferred6020 Years$250,000$127.77$1,485.97
Company BYesSelect Preferred6020 Years$250,000$112.80$1,311.94

Simplified issue insurance policies up to standard and preferred health levels really help our busy customers. We can get you GREAT pricing, with no extra medical appointments on your end. Your MLM mortgage protection agent does not have access to these insurance companies.

I want the best pricing

If you want the best pricing, and you are healthy, we will take a look at a fully underwritten policy including a medical exam. Most mortgage protection insurance agents won’t do this for you. It’s not profitable for them with their expensive lead costs, and their mortgage protection companies encourage agents not to offer these insurance products to their clients.

What if I have health issues?

If you have significant health issues, then a simplified issue mortgage protection policy up to table 4 is appropriate. However, if you are healthy and were sold a mortgage protection policy up to table 4, then that is an inappropriate policy, and you are paying too much.

Why do mortgage protection companies and mortgage protection insurance agents sell expensive policies?

Most mortgage protection insurance agents will only sell you one policy in your lifetime. With an employee turnover rate of about 85% in the insurance industry, the insurance agent who sold you your mortgage protection policy will likely not be around next year.

By issuing simplified issue insurance policies, the MLM mortgage protection insurance agent gets paid his commission, and their “upline” manager gets paid his commission on the agent’s sale. New leads will be purchased in the next week, and the mortgage protection insurance agent will be on to greener pastures.

We do things differently

We believe that if we treat you fairly, are honest, and get you the best pricing available, you will come back to us in following years. We also believe you will refer us to your family and friends. This is good business, and this business never has to be purchased through leads!

We also don’t pressure our clients into purchasing products they don’t need or sell them overpriced mortgage protection policies. We make sure our clients understand what their plan costs, and why we recommended it to them.

About 70% of the time, our customers are surprised to find out they don’t have what they think they had in their current insurance coverage, or that there were better options available. We make sure our customers know exactly what they are purchasing and all relevant policy inclusions and exclusions.

We are happy to be a 100% independent insurance agency, and not a large corporate mortgage protection insurance agency. This gives us greater freedom to serve our clients better, and get them the best pricing for the mortgage protection insurance they so desperately need.


We work with individuals across the nation to secure the best mortgage protection rates.

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