Getting life insurance is not easy for everyone. For some – especially those who may have an adverse health issue – qualifying for the life insurance protection that they need can be difficult. This is because the underwriters at life insurance companies will review the health condition of an applicant to ensure that the carrier is not taking on too much risk.
The same will often hold true for those who are seniors. Because life insurance applicants are evaluated based on life expectancy, those who fall into the older age brackets are typically considered to be a higher risk to insurance companies. Therefore, the likelihood of them having to pay out a life insurance claim will be higher.
So, for those who are seniors or those who have health conditions and who still need life insurance protection, what are the available options? One alternative is to apply for a no medical exam life insurance policy.
What is No Medical Exam Life Insurance?
No medical exam life insurance is a type of life insurance coverage that does not require an applicant to undergo a medical examination as a part of the underwriting process. Typically, when applying for most types of life insurance, an applicant will be required to meet with a paramedical professional (or “paramed”).
During this meeting, the paramed will usually ask some in-depth health questions. They will also usually take a blood and a urine sample from the applicant for life insurance. These samples are then tested for various health conditions that could be deemed as risky for the insurance carrier.
Because of this, those who have health issues such as diabetes and other serious conditions may not qualify for what is referred to as “medically underwritten” life insurance coverage. But, without having to take a medical exam, qualification for coverage can be much easier.
Also, because there is no medical underwriting to contend with, a no medical exam life insurance policy can also often be approved much more quickly than a medically underwritten policy. Therefore, someone who applies for no medical exam coverage may have his or her policy approved in as little as 48 hours – or possibly even sooner.
Types of No Exam Life Insurance
There are a couple of types of life insurance you can get without the physical. There are several other classifications under these but the main two types of no exam life insurance are:
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 policies for 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:
- Is the annual premium at least $300?
- 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,
- If retired or currently unemployed, are you physically and mentally capable of being employed on an active full time basis?
- 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?
- 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?
- 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?
- 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?
- 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?
These types of policies can be more specialized and have names like burial life insurance or final expense insurance. In reality they can cover much more than just your final expenses.
How Does No Medical Exam Life Insurance Work
In many ways, no medical exam life insurance policies work the same way that other life insurance policies do. For example, these plans will offer the payment of a death benefit in return for the payment of a premium. The premium amount, however, on a no medical exam policy will usually be higher than that of a comparable medically underwritten policy. That is because the applicants for no medical exam coverage are usually considered to be riskier to the insurance company.
How Much Coverage Can You Purchase?
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.
With 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 a 1 million dollar life insurance policy, 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.
|Sex||Age||Policy Face Amount||Assurity's Non-Med Term 350||Cheapest Term Insurance|
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.
How Is No Exam Life Insurance Different from Medically Underwritten Coverage
While there are some similarities between no medical exam life insurance and medically underwritten life insurance, there can also be some differences. Certainly, the biggest difference is in the way in which the plans are applied for. There are different types of no medical exam life insurance.
With a simplified issue policy, there will be some health questions that the applicant must answer in order to be considered for the policy. The answers that the applicant provides to these questions will also help the insurance company with coming up with an amount of premium to charge for the coverage. These questions will typically include:
- Do you smoke?
- Have you tested positive for HIV / AIDS?
- Are you living in a skilled long-term care facility?
A no medical exam policy may also be what is referred to as a guaranteed issue policy. In this case, there will be no health questions on the application – and, given that the premium for the policy is paid, it will remain in force.
No medical exam life insurance can also differ from other types of life insurance coverage in the way that the death benefit is paid out. This is because there may be circumstances where not all of the stated amount of a policy's death benefit will automatically be paid out upon the death of the insured.
For example, if the plan has graded death benefits, then it may pay out only a certain percentage of the total if the insured passes away within the first few years of policy ownership.
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.
Another potential candidate for a no medical exam life insurance policy is someone who may have either a “risky” occupation and / or who participates in a risky hobby. For example, there are certain occupations that life insurance companies deem as being too risky to insure with traditional life insurance coverage. These can include firefighters, window washers, and race car drivers. Likewise, people may participate in risky hobbies such as rock climbing, scuba diving, or sky diving. Because of this, these individuals may be forced to apply for alternate forms of coverage such as no medical exam life insurance – even if they are in good medical health.
Still others who may wish to apply for a no medical exam life insurance policy are those who have a fear of needles. There are some people who do not like medical procedures – including giving blood and having blood drawn using a needle. Because of this, the paramedical examination that is required for a medically underwritten life insurance policy may be too uncomfortable for them – and therefore, in certain instances, may even force some people to go without life insurance coverage.
What to Look for in a No Medical Exam Life Insurance Policy
When shopping for a no medical exam life insurance policy, you will want to ensure that you have the best policy for you and your specific needs. Therefore, you will want to make sure that you have the right type and amount of coverage.
In doing so, there are some important things to look for in a no medical exam life insurance policy. These include the following:
- Death Benefits – When you apply for your coverage, you will want to ensure that you know whether the benefits will be paid out 100% to the named beneficiary, regardless of when the insured passes away, or if they will be graded and only be paid out as a percentage for a certain period.
- Premium Amount – You will also want to know how much you will be paying in premium. In comparison to medically underwritten life insurance policies, a no medical exam policy will typically cost more – sometimes three to four times more – in premium due to the added risk that the insurance carrier is taking on. Therefore, it is important to have a good understanding of the amount that the coverage will cost. Depending on the situation, it may make sense to first apply with a medically underwritten policy and if you do not qualify, then go the no medical exam route. If you are applying via a no medical exam policy, it is still wise to compare several different no medical exam policies in order to determine which will offer the best premium. In doing so, working with an agency or a company that has access to multiple carriers is wise.
- Insurance Carrier – It is also a good idea to review the financial strength and the claims paying reputation of the insurance carrier that you are purchasing the coverage through, as you will want to ensure that the company will be there to pay out the claim if and when the time should come. Checking the ratings that are provided by Standard & Poor's, A.M. Best, Fitch, and / or Moody's is a good way to determine this. Checking the information provided through the Better Business Bureau can also help to get an idea of whether the insurer has had many complaints.
How and Where to Obtain the Best No Medical Exam Life Insurance Quotes
When shopping for the best premium quotes on no medical exam life insurance coverage, it can help to compare multiple carriers. That way, you can determine which of the companies, benefits, and premiums will work best for your specific situation and needs.
When shopping for no medical exam life insurance coverage, you may have some concerns as you go through the process. There are several variables to know as your construct the ideal policy for you – and you want to ensure that you have the right type and amount of protection. The good news is that we are on your side. We have a wide array of life insurance carriers here and are able to help you find one that can best suit your coverage requirements. So, contact us today – we're here to help.
So yes, getting a no medical exam life insurance policy is a reality, if you want to pay for it.