Life insurance without exam: advantages and disadvantages


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Getting life insurance often requires passing a basic medical exam so an insurer knows if a potential customer is sick before issuing a policy. But there are, in fact, certain types of life insurance policies that do not require a medical exam. They are colloquially known as “no exam life insurance” and they have the potential to cover you if you cannot qualify for a traditional life insurance policy with a medical exam or if you simply prefer the convenience of not having to take an exam.

But even if you can get life insurance without having to pass a medical exam, should you? What are the benefits and what are the trade-offs? Let’s take a look at the pros and cons to see if a no medical exam life insurance policy is right for you.

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In life insurance, you and your life insurance company are essentially making a commercial bet. Your side of the bet is that the total you’ll pay in premiums over the life of the policy will be less than the benefit your family will receive if you die while your policy is in force. Yet the life insurance company is betting the opposite – that you will pay more premiums and fees than it will have to pay at the end, or that your policy will expire before you die, so no benefit will be paid. at all .

So it’s no surprise that most life insurance providers don’t make this deal without more information about your overall health. Because if you already have a life-threatening illness, the policy is more likely to cost the company money instead of generating profit.

A traditional medical exam for life insurance typically includes measurements of your height and weight, blood pressure, blood and urine samples, and more. For many people, that’s not a huge burden, but it’s also another to-do list item that could cause you to put off life insurance in the first place, leaving you without coverage if something goes wrong. unexpected thing happens.

This is where no exam life insurance comes in. It offers the possibility of taking out life insurance without having to pass a medical examination. However, because a life insurance company is betting more on insuring a person without going through a medical exam, the rates for no-exam life insurance are usually higher than for life insurance. – standard term life.

Fortunately, since term life insurance premiums already tend to be low, the amount of life insurance you need can still be affordable, even without a medical exam.

Generally speaking, no exam life insurance can be a good option for:

  • Young people.
  • People who are willing to pay higher premiums to avoid a medical exam.
  • Consumers who only need life insurance coverage at lower limits than they could otherwise get with an exam.

As an example of this last point, medically underwritten term life insurance from Haven Life is available for amounts up to $1 million. But if you buy a simplified issue policy from the same company (meaning no medical exam is required), your death benefit is limited to $500,000.

Interestingly, new technologies have allowed more and more companies to offer life insurance policies without a medical exam. These companies use advanced algorithms, statistics, and insurance records to determine if you are a suitable candidate for a no-exam policy based on their underwriting guidelines.

So even in our Haven Life example, the medically underwritten policy does not always require an actual medical exam. Depending on your answers to the health questions in the insurer’s application, you may be approved for a standard policy without having to go to a doctor’s office. That’s why it’s probably worth checking your eligibility for regular term life insurance first before turning to no-exam claims.

Even if you don’t need to purchase any life insurance for consideration (or just prefer to), the costs can be reasonable. For example, a 31-year-old woman in excellent health who applies for a 20-year term policy with $500,000 coverage through Bestow, a term life provider that offers no exam coverage, can pay as little as 18 $ per month. Some of these companies even offer instant decision life insurance policies based on the information you provide.

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While many people think that no-exam life insurance is an option only for young and healthy people, there is another type of no-exam life insurance that caters to the older population. Guaranteed issue life insurance is a type of whole life insurance that is guaranteed to be issued regardless of health status. This means that no medical underwriting is required, and therefore no medical examination.

Guaranteed issue life insurance can be a good option for:

  • Elderly people in good or bad health who wish to leave money to pay their last expenses.
  • Anyone with medical conditions that would prevent them from being eligible for a traditional life insurance policy.
  • People who are willing to accept a smaller death benefit and more fine print in exchange for not having to undergo a medical examination.

Most guaranteed issue life insurance policies are designed to pay final expenses. This means that the death benefit for guaranteed issue policies is generally much lower than what you’ll find with most traditional life insurance plans.

Guaranteed issue life insurance also requires relatively high premiums relative to the death benefit, which makes sense since these policies are for seniors with existing health conditions. For example, a 65-year-old woman applying for a RAPIDecision guaranteed issue policy with Fidelity Life would pay $55.65 per month for a terminal expense policy with a $10,000 death benefit.

That’s a lot to pay for fairly low coverage. In fact, if this 65-year-old woman lived another 15 years to age 80, she would end up paying just enough in premiums to cover the entire $10,000 death benefit. And for every month she lived past 80, she would pay more than her family would end up getting.

Also, keep in mind that guaranteed issue policies sometimes offer a graduated death benefit that changes over time. In these cases, if you die a few years after your policy was issued, your beneficiaries may only recover the premiums you paid, or a refund of premium plus an added percentage.

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If you’re in excellent health, term life and whole life policies are generally a better choice than no-exam life insurance. Even if it is a problem, by agreeing to take an exam, you have the option of benefiting from a medically underwritten policy with rates and conditions based on your general health and life expectancy. And if your health is good, that’s great news.

But no exam life insurance may be the answer for young people in excellent health who won’t be penalized for not having a medical exam, or seniors who just want coverage for final expenses. Of course, it’s always a good idea to weigh the pros and cons of opting for no-exam coverage over a medically underwritten policy if you can qualify.

Take the time to think about your needs and goals, and do your due diligence before purchasing a life insurance policy. Your beneficiaries rely on you to make the right choice, so make sure any decision you make is informed.

Check your life insurance rates with multiple insurers using Policygenius now.

Not sure if no exam life insurance is right for you? Read CNN Underscored’s guide to the different types of life insurance.

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