Life insurance is a way to safeguard your family’s financial future should you pass away. This is true no matter how young, old or healthy you are.
Unfortunately, there are a few factors which can make purchasing a life insurance policy difficult. Some key areas insurers consider are your age, weight and if you have any pre-existing medical conditions. If you’re older, with health challenges, finding affordable life insurance can be a challenge.
Yet, even people in these situations find success with no medical exam life insurance. Looking for more info on this type of life insurance policy but not sure about it just yet?
The Most Commonly Asked Questions About No Exam Life Insurance Coverage
We’re here to help you tackle those lingering questions before you purchase. We want to make sure you’re confident you’re choosing the right type of policy for you and your family. Remember, a no exam life insurance policy isn’t for everyone. Here are the most commonly asked questions we get most often about no exam life insurance:
What Is No Exam Life Insurance?
This is a general term for a variety of different types of life insurance where you could be accepted even while bypassing the medical exam. Each type has varying levels of qualifications. The general idea is to provide life insurance faster, and for people who would typically be denied by other types of life insurance due to their age, medical history or other general health conditions.
Some no exam life policies offer fairly robust death benefits, with a general top limit of $500,000. Other carriers go up to a million. This can provide substantial financial assistance to your surviving loved ones. Other policies will cover pretty much only the basics, such as funeral expenses and other small costs.
Generally speaking, the fewer questions and exams a policy requires, the lower the overall benefits will be. You can also expect a higher cost per thousand of death benefit, on average. For many people, especially those with serious medical issues, even a smaller life policy ends up providing a lot of value for the surviving family.
What Is Simplified Issue Life Insurance?
As the name implies, these are fairly straight-forward policies. They’re fairly flexible, too. There are two general types:
- Term life: Available for those between the ages of 21 and 65. Death benefits vary from $50,000 to $1,000,000. Term length options are 10, 15 and 20 years where the premiums you pay won’t change. However, they increase substantially thereafter.
- Universal life: Benefits vary from $25,000 to $50,000 for higher risks, though healthy applicants can get substantially more. Both cost and death benefits are fixed for life, or as long as you make your payments. Available for applicants between the ages of 21 and 65.
The simplified issue refers to little to no underwriting questions on the application, and fewer or no exam requirements. Depending on the product you choose and carrier you apply to, you will see different prerequisites to an approval.
What Are Level Benefits?
This means the death benefit and costs are fixed for life. Generally, the earlier you buy, the more you’ll save. There are a variety of policies with level benefits. For instance, the simplified universal life plan mentioned above offers level benefits for as long as you keep your policy current, where the term is specified to a finite period.
Another policy which offers level benefits is a whole life policy. These are available for anyone up to the age of 80, and are generally available to those with health conditions such as diabetes and high cholesterol. However, this also means the death benefits are generally lower. They average around $5,000 to $25,000, though higher amounts are available.
What Are Graded Benefits?
This is a different way benefits are paid out. Graded benefits grow the longer the person holds the policy. For instance, death benefits are often restricted during the first two years after the policy is purchased. Benefits could pay out at 40% during the first year, 75% during the second and then 100% from the third year on, for example.
These policies are often available for people with moderate health problems such as heart disease, type I diabetes and similar. Because these policies are available to people with health problems, the price is often higher than a policy with guaranteed death benefits from day 1.
What Are Guaranteed Issue Policies?
These are life insurance policies where applicants are asked no health questions and need no exam. You might have seen these types of policies advertised on TV.
If you can qualify for a different type of life insurance policy, that is usually a better option. But, if you, or a loved one, is in poor health and can’t find another type of coverage, these policies do offer some solid benefits from between $5,000 and $25,000.
You simply can’t be turned down as long as you can pay and meet the minimum age and death benefit requirements.
What Is The Application Procedure Like?
With guaranteed issue policies, you won’t be asked any health questions. In some cases, the insurance provider will require a waiting period. This means you can purchase the policy right away, but full benefits won’t be paid out until at least two years have passed, maybe even three.
For other types of no exam policies, you’ll need to fill out a written questionnaire and conduct a phone interview with the insurance agent or carrier. Additionally, the company will review existing information including Motor Vehicle Records, pharmacy or prescription records, and possibly other health related information.
Any additional requirements are determined by the carrier.
How Long Does A Typical Approval Take?
The answer depends on the type of policy. Some policies offer instant coverage upon approval. Others can take several business days to reach approval.
If you’ve previously been denied by a life insurance provider, then you may find it harder to get approved. It’s not impossible, though the company you apply to will likely want more information before proceeding.
Why Would I Want A No Exam Policy?
There are many life insurance policies which require a medical exam before purchase. Here are the three reasons you might prefer a policy with no medical exam:
- No Trip to the Doctor’s Office – For some, a trip to the doctor is an inconvenience. For others, a trip can be logistically difficult. A no medical exam life insurance policy means you don’t have to leave your home.
- Quick Decision – Some no exam policies go into effect the same day you’re approved. For certain life situations, getting coverage fast is a necessity (like meeting requirements for an SBA loan).
- Less Medical Scrutiny – This can help avoid higher rates associated with certain pre-existing conditions, even if you don’t know about them.
What Are The Disadvantages Of A No Medical Policy?
If you do choose a no medical exam policy, you’ll could experience some limits on coverage. This includes a waiting period and often a decreased payout within the first two years of policy ownership, not having access to enough death benefit if you need a larger policy, and some no exam policies do not provide coverage for those over a certain age.
There are usually more limits on coverage with a no exam policy. Each individual will have to weigh the advantages and disadvantages of the no exam policy in regards to their specific health situation and coverage needs.
For many people, however, a no exam policy is a convenient, effective way to provide at least some assistance towards their family’s financial future. Don’t let a trip to the doctor’s office prevent you from obtaining life insurance.