How Life Insurance Without Medical Exam Works
Do you need life insurance, but have delayed applying because you’re not comfortable with a medical exam? If so, you are not alone. And for that reason, the life insurance industry has created a different way to apply that doesn’t involve a medical exam.
Applying for life insurance without a medical exam can be more expensive, have a lower death benefit, or have shorter terms than traditionally written policies. However, it allows you to apply for life insurance even if you cannot pass a medical exam. An option is better than no option.
What is life insurance without a medical exam?
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Life insurance without a medical exam is exactly what its name implies. It is a life insurance policy in which the insurance company does not require the applicant to undergo a medical examination. That kind of policy can be a relief to a person who fears doctors and medical tests.
But just because a life insurance policy doesn’t require a medical exam doesn’t mean health considerations are ignored.
Not only may you be asked to answer a host of health-related questions on the app, but the company may also search available health databases to determine your health status based on sources of information. third parties.
They review information from databases dedicated to health insurance and research specific health events that raise questions. They can also check your driving record with the state, run a criminal background check, get a copy of your credit report, and any other information they feel is necessary to make an informed decision when signing your application.
Because the insurance company conducts a detailed investigation of your health information, life insurance without a medical exam is not an option if you simply want to avoid disclosing a specific health condition. The insurance company is likely to find out even if you don’t disclose it, and if they find out after your death, they may deny your claim.
How does life insurance without a medical exam work?
Insurance companies may target young applicants in good or excellent health to apply for policies without medical exams. Both states reduce the risk of premature death by the applicant and the payment of the death benefit by the insurance company.
Life insurance without a medical exam is usually offered only as term life insurance. Those terms may also be more limited than fully medically underwritten policies. For example, while a fully medically underwritten term policy may be available for 30 years, a no medical exam policy may only be available for 10 or 20 years.
Here’s how to determine if whole or term life insurance is best for you.
What are the different types of life insurance without a medical exam?
Life insurance without a medical exam comes in various forms. Three examples include:
group life insurance
Generally offered by employers, unions, and certain professional groups, group life insurance is available to participants without a medical exam or medical qualification. You will be admitted to the plan and covered as a result of your membership in the employer, union, or professional group. You do not have to meet any criteria individually.
Simplified issue life insurance
Simplified issue life insurance typically comes without a medical exam, but it is still a medically underwritten policy.
On the life insurance application, you will need to complete a series of questions about your health status. Those questions can be quite detailed, even asking for information about alcohol consumption and recreational drug use.
Instead of a medical exam, the insurance company will rely on available databases, such as the MIB. That’s kind of like a credit report for health profiles that the insurance industry uses extensively.
Final expense or guaranteed issue life insurance
Some applicants are in such poor health that they cannot qualify for traditional life insurance policies, let alone traditional life insurance without a medical exam. However, such applicants may purchase guaranteed issue life insurance, sometimes referred to as final expense insurance, without any medical consideration.
Not only will there be no medical exam, but no medical questions will be asked. That is the whole purpose of the word “guaranteed” in guaranteed issue life insurance. You’ve probably even seen these policies advertised on TV (“You can’t be turned down for coverage”).
However, they are not without limitations. For example, the policies are available only to applicants between the ages of 50 and 85. They are lifetime policies, which makes them much more expensive than term insurance.
An even bigger limitation is the death benefit. Most are over $25,000, but there are a few that will go as high as $50,000. That’s where the name “final expense” comes in. A death benefit of that size will pay little more than final expenses at death. Little will be available to serve the beneficiaries of the insured.
There is one more limitation with guaranteed issue life insurance, and that is what is known as a gradual death benefit. Since the insurance company is writing the policy without your health in mind, the death benefit is not paid for the first two years of the policy. If you die within that time, your beneficiaries will receive a refund of the premiums paid, plus interest.
The premium for a guaranteed issue life insurance policy is higher per thousand than for any other type of life insurance. The premium for a $25,000 guaranteed issue life insurance policy can cost several thousand dollars per year.
How much coverage is available with life insurance without a medical exam?
This is one of the most important limitations of life insurance without a medical exam. While you may be able to get a multi-million dollar death benefit with a fully medically underwritten policy, no medical exam policy limits the death benefit too much less.
For example, the same company that offers $5 million in coverage for a fully medically underwritten policy may limit a no-exam policy to just $500,000. Some of the more generous providers, like Bestow (see below), specialize in no-exam life insurance and will go as high as $1 million.
How much does life insurance without a medical exam cost?
The short answer: more than a fully medically underwritten policy.
By providing life insurance without a medical exam, an insurance company assumes a greater risk than in the case of a fully medically underwritten policy. For that reason, they charge a higher premium.
Without a doubt, the medical background check conducted by the insurance company will reveal the most information related to the health of any applicant. But the medical exam is the only aspect of the application process that can definitively tell the insurance company the exact state of health of the applicant as of today. Refusing that step increases the risk for the insurance company.
For that reason, you should expect to pay at least a slightly higher premium for no-exam life insurance. In a typical scenario, you will be assigned a standard risk rating, rather than a Preferred Plus or Preferred rating, even if you are in excellent health.
The pros and cons of life insurance without a medical exam
Pros:
- If medical tests make you nervous, this type of policy will eliminate that problem.
- The absence of a medical exam means faster policy approval and issuance.
- You won’t need to leave time in your schedule for a visit from the insurance company nurse.
Cons:
- It costs more than an equivalent amount of coverage under a fully medically underwritten policy.
- Shorter terms than fully underwritten policies.
- Lower death benefit.
- Term coverage only is rarely available for permanent insurance coverage.
- You must be younger and in good or excellent health to qualify.
Where to get life insurance without a medical exam
Many companies offer a no-exam option, but in most cases, those plans are very limited. On the other hand, some life insurance providers specialize in life insurance without a medical exam. If you prefer a policy without a medical exam, you’ll want to see any of the following providers:
Grant
Bestow could be the best choice in life insurance agencies if you are looking to get life insurance without a medical exam. That’s because they practically specialize in this type of coverage. The entire application process takes place online and you can literally be approved for a policy in a matter of minutes.
Bestow is part of a growing number of online life insurance fintech. These are companies that operate entirely online and use non-traditional life insurance underwriting methods, relying primarily on technology. For example, instead of requiring a medical exam, they rely on the vast amount of health information available in medical databases.
HavenLife
Sprout is not a direct life insurance provider, but rather an online life insurance marketplace. That has the advantage that you can complete a single online application and get quotes from multiple participating life insurance companies. That will give you the opportunity to do a side-by-side comparison of the various offers and choose the one that works best for you.
Sprout is a licensed insurance broker and can provide you with direct support during your search for life insurance. They have also developed what they call an Artificial Intelligence Guided Assessment that will help you not only live a longer and healthier life but also qualify for life insurance at a lower cost.
One of the main advantages that Sprout offers, and the involvement of several insurance companies, is that you are more likely to obtain a life insurance policy if you are older or have health problems.
final thoughts
If you’re absolutely terrified at the prospect of undergoing a medical exam, and some people are, you should seriously consider life insurance without a medical exam.
But given all the limitations, including a higher premium, a lower death benefit, a shorter policy term, and the requirement to be young and in good or excellent health, you’ll probably feel better about getting screened. doctor and get all the benefits. of a fully medically underwritten policy.
