Should You Buy No Exam Life Insurance?

The last time I went to get blood work done, I nearly fainted.

No Exam Life Insurance

Those words came from a prospective client that was looking to buy life insurance from me.

Just hearing the word needle made her feel faint.

The thought of seeing blood would literally make her pass out.

This is just one example of an individual who should consider buying no exam life insurance.

The web is currently plastered with promises of getting cheap life insurance with no medical exam.

If you’ve wondered if it’s really possible to get cheap life insurance without having to go through a physical, let’s see if we can dispel some of the myths.

First, let’s look at the types of no medical exam life insurance:

Guaranteed Issue Life Insurance

This is sometimes referred to as guaranteed accepted life insurance. This is by far one of the most expensive types of life insurance you can get.  It doesn’t require a medical exam and also does not require to view your medical records.  Most guaranteed issue policies will have you answer about 12 questions, but one carrier will only you require you to answer the four simple questions:

  • Do you smoke or use tobacco?
  • Are you currently residing in a hospital or long-term-care facility?
  • Do you have AIDS or HIV?
  • Have you been declared terminally ill (defined here as having less than 24 months to live)?

Guaranteed Issue Life insurance often have what’s called a “graded death benefit”.  Typically, that means that if the insured were to pass away in the first 2 or 3 years of taking out the policy, the beneficiaries would only get the premium plus interest.  As you can see, in addition to cost, guaranteed issue is not the most affordable option.

Simplified Issue Life Insurance

Simplified issue is one of the more common types of no medical exam life insurance. Simplified issue allows you to bypass the medical exam, but they will ask you some medical related questions and may also pull your medical records. If the questions or your medical records don’t jive with the insurance company, the chances are you won’t get approved.

Here’s a sample of more questions that a Simplified Issue Policy would ask:

  1. Is the annual premium at least $300?
  2. Are you currently employed and have you actively and continuously participated in the duties of your regular occupation on a full time basis (at least 30 hours per week) for the past 6 months? Or,
  3. If retired or currently unemployed, are you physically and mentally capable of being employed on an active full time basis?
  4. Have you been disabled for 30 days or longer during the previous 12 months, and has said disability prevented you from performing your normal daily duties or activities, or are you currently receiving disability benefits?
  5. In the last 5 years, have you been diagnosed by a member of the medical profession as having, or have you been tested positive for or been treated by a member of the medical profession for any of the following: Acquired Immune Deficiency Syndrome (AIDS), AIDS Related Complex (ARC), HIV virus, or any other disease or disorder of the immune system?
  6. Within the past 24 months, have you used or are you currently using narcotics, amphetamines or any controlled substance, other than on the advice of a physician?
  7. Are you now receiving or within the past 12 months have you received chemo or radiation therapy for cancer or have you ever been diagnosed as being terminally ill?
  8. Do you require any assistance with two or more of the following activities: bathing, dressing, toileting, indoor or outdoor mobility, or eating or do you use oxygen for a medical condition?

How Much Coverage With No Medical Exam Life Insurance

One of the down sides of obtaining life insurance with no medical exam is that the amount of coverage you can secure is far less than what you can get with a traditional underwritten term policy.

no medical exam life insurance - Simplified IssueWith guaranteed issue policies, the largest amount you can get is $100,000, and that’s with a company named Guaranteed Trust Life.

For simplified issue, the most that you can obtain is $350,000 of coverage, and that’s only if you’re under the age of 50. Currently, Assurity is an insurance company that offers a simplified issue product that allows you to get this coverage.

Another carrier, Fidelity Life Association allows you to get up to $250,000 of coverage. As you can see, if you’re an individual that needs to buy $1 million of life insurance, going the simplified issue route won’t work. If you need $500,000 of life insurance coverage, it is possible to combine two of the simplified issue carriers together. You could get $350,000 of coverage with Assurity and the remaining $150,000 with Fidelity.

The Cost of No Medical Exam Policies

Regarding all the ads you see talking about getting cheap life insurance with no medical exam, that’s not exactly the case, at least when you compare it to traditional underwritten term policies. Any time that you are bypassing getting a medical exam, it’s going to cost more. Think about it.

Since the insurance company does not have to go through the traditional underwriting procedures, they are taking a higher risk by insuring you. Because of that, they are going to have to charge a little bit more for the coverage. That being said, simplified issue insurance products aren’t super-expensive, but there’s no question that going the traditional underwritten route will save you money.

Here is a cost comparison of a 30-year-old male and female applying for $250,000 of life insurance between Assurity and the cheapest life insurance company.

SexAgePolicy Face AmountAssurity's Non-Med Term 350Cheapest Term Insurance
Male30$250,000$34.76/mo$18.92/mo
Female30$250,000$28.38/mo$15.66/mo

As you can see, going the non-medical route is MUCH more expensive.  If you have the time and thought of needles doesn’t make you queasy, then a traditional term life insurance policy is much more affordable.

Who Should Purchase No Exam Life Insurance Policies?

If you have the ability to wait four to six weeks to get a life insurance policy, you should bypass any of the no medical exam policies. If you’re in need of a life insurance policy fast, the simplified issue might make the most sense. We’ve had individuals that have needed to get life insurance coverage, either to secure a loan for a business, to satisfy the collateral assignment of a life insurance policy,  to honor a divorce decree or, as mentioned above, just can’t stand the thought of getting their blood drawn. In these types of cases, it can make total sense.

The individuals that need the life insurance fast, Fidelity Life has the ability to have your policy underwritten in 48 hours. Assurity will have your policy done anywhere between seven to ten days. There’s even another carrier, OneClickCoverage that I literally just discovered, that will have a decision regarding your policy in literally minutes.

So yes, getting a no medical exam life insurance policy is a reality, if you want to pay for it.

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Comments | 3 Responses

  1. says

    If you’re in good health than you should strive to have coverage which likely would require an exam. Obviously if you get no-exam coverage, you’re going to get the lowest possible coverage based on the per dollar cost of what you’re contributing, but if you can prove your health via an exam, your risk will be lower and they’ll charge you less (or give you greater coverage for the dollar).

  2. Rowena Pabo says

    Life insurance is critical your web site has lots of fine information. Many thanks for expressing everything you know about life insurance with no exams.

  3. says

    Thanks Jeff. While there are a FEW reasons why no exam insurance is appropriate, it still makes my blood boil when I see the commercials and online ads. So expensive. As usual you’ve laid out the details perfectly :)

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