The 4 Different Types Of No Exam Life Insurance Underwriting

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Data is the way of the future.

And, it’s transforming everything, including no exam life insurance underwriting.

In the past, most life insurance applications involved a paramedical exam. In other words, your application would often sign you up for a little poking, prodding, and liquid samples.

That’s not the case anymore!

Now, you have options which don’t involve a nurse.

Here, we’ll discuss the four different types of underwriting for no exam life insurance so you can make an informed decision on your life insurance purchase.

Quick Overview

To begin, let’s define life insurance underwriting.

Underwriting is the process of risk assessment.

Generally, life insurance underwriters assess your:

Carriers absorb risk when they issue policies.

And so, underwriters conduct an evaluation of your information (data) in order to decide how much money to charge you in exchange for a life insurance policy.

Because our data is readily available through technology, it’s possible for underwriters to quickly gather information online and through databases, rather than through medical underwriting.

In fact, depending on the carrier and their specific steps, it’s possible to secure a no exam life insurance policy in a matter of minutes.

What this means The entire underwriting process can be accomplished online and over the phone.

Comparing The Different Types Of No Exam Underwriting

Specifically, there four primary types of no exam underwriting:

  1. Accelerated Underwriting (technically not a true no exam process)
  2. No Exam
  3. Simplified Issue
  4. Guaranteed Issue

You’ll want to be familiar with their similarities and differences.

Here’s why – your personal preferences and needs will determine what type of no exam underwriting makes sense for you because there are key distinctions:

AspectAcceleratedNo ExamSimplifiedGuaranteed
Wait Time48 Hours – 60 Days3 – 60 DaysInstant – 48 HoursInstant
CostLess ExpensiveLess ExpensiveMore ExpensiveMost Expensive
Possible APS*YesYesNoNo
Application DecisionHealth Classes VaryHealth Classes VaryAccept/DeclineAccept

Keep in mind – each no exam life insurance carrier uses their own underwriting process with specific steps and features.

Accelerated Underwriting

Definition – An adaptable underwriting process in which information is gathered about the life insurance applicant to determine if they qualify to skip the paramedical exam.

Generally speaking, Accelerated Underwriting (AUW) is not considered a true type of no exam life insurance underwriting.

What do you mean? The keyword here is, accelerated. Accelerated Underwriting means that if you meet specific criteria, you can qualify to bypass the medical examination.

Said differently, if you’re healthy, it’s possible to accelerate your application process, avoid the exam, and have your policy issue quickly.

However, not everyone qualifies. If you have a few health concerns, your odds of qualifying to sidestep medical underwriting decrease.

The result of AUW processes is to “rightsize” the underwriting with a less invasive underwriting approach and faster time from application to issue for certain applicants with higher likelihood that collection of additional information would not change the underwriting decision. – American Academy Of Actuaries

Main points – Accelerated Underwriting is best for an applicant in excellent health. Rates are competitive. You will need to be okay with possibly taking a paramedical exam.

How it works – you can generally expect the following steps for Accelerated Underwriting:

  1. Application submission online or over the phone.
  2. Interview lasting 20 – 30 minutes. Plan to be asked about your health, occupation, and lifestyle.
  3. Records review. Your underwriter will review your driving, pharmacy, and Medical Information Bureau (MIB) records.
    • Note – the MIB is an online database of previous insurance applications.
  4. Determination of whether or not you qualify for Accelerated Underwriting.
    • Qualify = application decision, multiple health classes available
    • Do not qualify = paramedical exam, then application decision

(True) No Exam

Definition – A form of underwriting in which life insurance is issued without a medical examination, however, records from your physician may still be ordered.

If you are committed to avoiding an exam and are generally healthy, no exam underwriting may be an excellent fit.

What do you mean? No exam usually has competitive rates and will never require a medical exam. Keep in mind, though, your records from your doctor (called an Attending Physician’s Statement, or APS) may be ordered.

Additionally, no exam underwriting usually has varying health classes.

For example, if you apply for a Preferred health class and a few health complications show up on your physician’s records, it is possible to be approved at a different health class, like, Standard.

Main points – No exam underwriting is best for someone in at least regular health. Rates are often competitive. You will always avoid the medical exam.

How it works – the no exam underwriting process typically involves:

  1. Application submission online or over the phone.
  2. Interview lasting 20 – 30 minutes. Plan to be asked about your health, occupation, and lifestyle.
  3. Records review. Your underwriter will review your driving, pharmacy, and Medical Information Bureau (MIB) records.
  4. Possible order of Attending Physician’s Statement, based on your application, interview and records.
  5. Application decision – multiple health classes available.

There are even companies who can issue coverage instantly, without a phone interview, like Haven Life. If you prefer to do the entire process online, at virtually any hour, check them out.

Additionally, disability insurance and accidental death coverage tend not to have any type of exam, making them true no exam policies, too.

Simplified Issue

Definition – A simplified form of life insurance underwriting in which the applicant answers health questions, will not have an Attending Physician Statement ordered, and avoids a medical exam.

Aptly named, Simplified Issue policies are quickly offered on a “yes” or “no” approval basis.

What do you mean? Simplified issue underwriting is straight and to the point. Plan to quickly answer health and lifestyle questions. (Accelerated underwriting and no exam tend to use lengthier questionnaires).  You will either be approved or declined.

You will not have an Attending Physician Statement ordered and there are not multiple health classes. Applicants with a few health complications are often excellent candidates for Simplified Issue.

Main points – Simplified issue underwriting is typically easier to qualify for and more expensive. Your turnaround time is fast – often within 48 hours or less.

How it works – the simplified issue underwriting process looks similar to these steps:

  1. Application submission online or over the phone.
  2. Quick interview with basic health questions.
  3. Records review, usually. Your underwriter will review your driving, pharmacy, and Medical Information Bureau (MIB) records.
  4. Application decision – either “approve” or “decline”.

Guaranteed Issue

Definition – Underwriting in which you are guaranteed to be approved for life insurance, regardless of your health status.

Guaranteed issue (GI) is often an applicant’s last resort for securing life insurance.

What do you mean? Guaranteed issue underwriting is the easiest form of underwriting to participate in – you only need to answer basic information about yourself. Often, no health questions are asked. Yet, GI is the most expensive and policy face amounts are modest.

Additionally, your death benefit is often graded – meaning your beneficiaries will not be paid your death benefit for typically the first two or three years of your policy.

Within minutes, you can purchase a guaranteed issue life insurance policy.

Not so fast, though.

You’ll want to verify that you do not qualify for simplified sssue or no exam life insurance, as those types of policies are more cost-effective with larger face amounts available.

Main points – Guaranteed issue is the easiest to qualify for and the most expensive. GI is best for applicants with serious health complications, like cancer. Death benefits are often graded. Face amounts are modest. And, age restrictions apply.

How it works – the guaranteed issue underwriting process is simple and straightforward:

  1. Application submission online or over the phone
  2. Policy issuance (almost always)

Bottom Line

Data is, indeed, the way of the future.

Fortunately, securing life insurance just got a lot easier, thanks to that readily available data.

Rather than poking and prodding, underwriters can rely on records during your life insurance application process. No exam underwriting means your life insurance can be purchased from the comfort of your home (without intrusions).

At the end of the day – your understanding of the different types of no exam underwriting will help you make an informed life insurance purchase.

Author:

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Heidi Mertlich

Heidi Mertlich is the owner of NoPhysicalTermLife.com. She is an independent life insurance agent specializing in no medical exam life insurance. Heidi is also an author for LifeInsurancePost.com, an online community of life insurance experts.

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