A standard medical exam is typically required when applying for a life insurance policy so that the insurance company can determine if the applicant is in poor health. However, some life insurance forms don’t necessitate a physical examination.
You may be eligible for these policies, commonly referred to as “no exam life insurance,” if you either do not meet the requirements for a typical life insurance policy that requires a medical exam or you would appreciate the flexibility of not having to undergo such an exam.
But should you obtain life insurance if you don’t need a medical exam? What benefits does it have, and what drawbacks does it have? Let’s consider the advantages and disadvantages of a no-medical-exam life insurance policy to help you decide.
What exactly is “no exam life insurance”?
Life insurance is essentially a commercial wager between you and the insurance provider. To put it another way, you are betting that the sum of the premiums you pay during the policy’s duration will be less than the death benefit your family would receive if you pass away while the policy is active.
However, the insurance provider is taking the opposite risk, betting that it will collect more from you in premiums and costs than it will have to pay out in the event of your death or that your policy will lapse before you do.
Most life insurance companies won’t agree to this without knowing more about your health history. Simply put, if you have a preexisting problem that could prove fatal, the insurance coverage is more likely to lose money for the provider than make money.
Standard life insurance medical exams typically collect data like height, weight, blood pressure, urine sample, etc. It’s not a tremendous hassle for most people, but adding life insurance to your to-do list can be discouraging. It could cause you to put off buying it until it’s too late.
This is where the option of life insurance with no medical exam comes in. It allows you to receive life insurance coverage without submitting to a medical exam. Premiums for no-exam life insurance are often higher than those for traditional term coverage since the insurance provider takes a more significant risk by covering the policyholder without conducting a medical exam.
Term life insurance rates are typically inexpensive, so you may be able to get the protection you need without having to submit to a medical exam.
Those who might benefit from a no-medical-exam life insurance policy include:
- Kids and teens.
- Those who would rather forego a medical checkup altogether and are willing to pay a higher premium.
- Policyholders who don’t need as much protection from a life insurance provider and who wouldn’t qualify for a policy requiring medical underwriting.
To illustrate this last point with an example, some companies’ medically underwritten term life insurance policies are available in sums as high as one million dollars. In contrast, the death benefit is capped at $500,000 if you buy simplified-issue insurance from the same insurer (no medical exam needed).
Technology advancements have allowed more and more insurers to provide life insurance coverage without needing a health assessment. Depending on the company’s underwriting criteria, they may or may not offer you no-exam coverage depending on the information you provide about yourself, such as your medical history and driving records.
Getting a physical examination to qualify for the medically underwritten policy is not always necessary. Suppose you answer the insurer’s health questions honestly. In that case, you may be able to get regular insurance without ever having to see a doctor. So, before applying for no medical exam life insurance, you should know if you qualify for traditional term life coverage.
Suppose you need or prefer to avoid taking a medical test to qualify for life insurance. In that case, you may be pleasantly surprised to learn that premiums for this option are competitive. For instance, Bestow, a term life insurance provider that solely provides no exam coverage, charges anywhere from $18 per month for a $500,000, 20-year term policy for a healthy 31-year-old woman.
Based on the information you supply, several of these companies even provide immediate decision life insurance plans.
Completely medically underwritten life insurance
Most people automatically associate no medical exam life insurance with younger and vital people. Still, coverage is available to the over-60 crowd that doesn’t require a physical. In contrast to traditional health-based underwriting practices, insurers must provide guaranteed issue life insurance policies regardless of an applicant’s health. Because of this, you won’t need to get checked out by a doctor as part of the underwriting process.
When looking for life insurance, guaranteed acceptance may be the best option in these circumstances:
- Individuals aged 65 and up in average to bad health who plan to leave money to loved ones for burial costs.
- The general population, especially those with health problems, that makes it difficult to obtain standard life insurance.
- Individuals who would rather avoid a medical exam than receive a more considerable death benefit and fewer protections may be interested in this type of policy.
The primary purpose of guaranteed acceptance of life insurance is to cover burial costs. As a result, the death payout for ensured policies is often substantially smaller than for conventional life insurance policies.
Given that guaranteed life insurance is designed for the elderly and those with preexisting health concerns, the premiums are naturally higher than the death benefit. If a 65-year-old lady were to apply for a RAPIDecision Guaranteed Issue policy from Fidelity Life, she would have to pay $55.65 per month to get a death benefit of $10,000 to cover her final expenses.
That’s a hefty price to pay for such a minimal level of protection. In reality, the premiums alone would add up to the full $10,000 death benefit if the lady aged 65 continued to live until age 80. The longer she lived past 80, the more she would have to pay than her loved ones would have received.
It’s important to remember that the death benefit offered by some guaranteed issue policies is graduated and might fluctuate over time. Suppose you pass away within the first few years of your policy’s inception. In that case, your beneficiaries may only receive a refund of your premium payments (or your premium payments plus an additional percentage).
Is it a good idea to obtain life insurance that requires no medical exams?
In most cases, ordinary term life or whole life insurance plans are preferable to no exam life insurance if your health is excellent. Getting a medical exam is inconvenient, but obtaining a medically underwritten policy may be necessary, which includes terms and premiums determined by factors such as your age, gender, health status, and expected lifespan. And, of course, it’s terrific news if you don’t have any significant health problems.
However, no medical exam life insurance may be the best option for those who do not want to be punished for not undergoing a physical test, such as younger persons in good health or the elderly who are only concerned with covering final expenses. If you qualify, it’s always wise to compare the benefits of a medically underwritten policy versus those of a no-exam policy.
Before choosing a life insurance policy, it’s essential to reflect on your needs and objectives. The people who will benefit from your decision count on you, so consider carefully before acting.
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