Many people purchase life insurance to help secure the financial stability of their loved ones after their death. In most cases, you must submit to a medical exam in order to purchase a life insurance policy, because the insurance company wants to assess the risks involved with insuring you. But some insurance companies offer life insurance policies without a medical exam.
How do these policies differ from those that require a medical exam? When is a good time to buy no medical exam life insurance? When should you avoid it?
Leading Causes of Death and Life Expectancy in the U.S.
According to the Centers for Disease Control and Prevention and National Center for Health Statistics:
- The leading causes of death in the U.S. in 2014 were heart disease and cancer.
- Other causes of death include chronic respiratory diseases, unintentional injuries, diabetes, and motor vehicle crashes.
- In 2013, the average life expectancy at birth was about 78 years old.
What Is No Medical Exam Life Insurance?
Typically, when you purchase life insurance, you are required to fill out paperwork and submit to medical tests in order for the insurance company to determine if you are eligible for coverage. A nurse or other health practitioner will ask in-depth questions and take blood and urine samples to test for various health conditions that make you riskier to insure.
If you have health problems, you could face significantly increased premiums, or even rejection.
No medical exam life insurance is a way to skip the paperwork and exams and obtain a small amount of life insurance even if you have some health problems. Basically, it is a way for you to get life insurance without a physical exam. No exam life insurance is also commonly referred to as “guaranteed issue” and “simplified issue” life insurance. These policies are often marketed to older people who might have medical issues that make getting other life insurance difficult.
No medical exam life insurance policies are term life insurance policies, often with a relatively low face value. Term life insurance policies pay a death benefit if the insured person dies within the policy term, such as 10, 20, or 30 years. No medical exam policies often have lower face values, but can be purchased for larger amounts, such as $250,000 to $500,000.
You can obtain term life insurance quotes for no exam coverage with no medical exam and perhaps only a few medical questions. Your premiums may be higher based on your answers. This may seem like a fast, easy way to get life insurance, but because the insurance company has no insight into your health condition, your premium will be much higher for the amount of coverage that you buy.
The Two Types of No Medical Exam Life Insurance
Guaranteed issue life insurance. Also called guaranteed acceptance life insurance, this does not require a medical exam, nor does the insurance company review your medical records. Usually you will be required to answer only four simple questions:
- Do you smoke?
- Are you currently in a hospital or long-term care facility?
- Do you have AIDS or HIV?
- Have you been declared terminally ill?
Guaranteed issue policies can provide some level of protection and comfort for you. But they are also extremely expensive relative to other forms of life insurance, and offer a relatively low benefit.
Simplified issue life insurance. This typically does not require a medical exam, but the insurance company will ask more detailed medical questions and may ask to view your medical records. You may be rejected for coverage if you have certain medical issues.
When to Buy No Medical Exam Life Insurance
No medical exam life insurance is often marketed as affordable, convenient, and fast. While this is somewhat true, it is still not the right solution for everyone. Only certain people will truly benefit from purchasing no exam life insurance.
- If you have a chronic health condition like diabetes that is not under control, purchasing life insurance can be expensive or impossible. You may be able to purchase guaranteed issue life insurance in these cases.
- If you cannot wait to purchase a fully underwritten policy, no exam life insurance may be a good option. These policies can sometimes be issued in as little as a few days.
- If you have a risky occupation or participate in a risky hobby, you might have a hard time getting life insurance that utilizes a complete underwriting process, even if you are healthy.
- If you are older or have a serious health condition and want to help your loved ones pay for funeral or final expenses, a no medical exam life insurance policy may help give you peace of mind.
- If you have health problems and your employer does not offer group life insurance, no exam life insurance may be a good option for you. Employer-provided life insurance is usually obtainable even for those with health problems, and it is usually very affordable for small amounts of coverage. But if you lose your job or your employer stops offering the coverage, you may be a good candidate for no medical exam life insurance if you have no other options.
If these circumstances do not apply to you, and you want to provide for more than just final expenses, no medical exam life insurance is probably not for you. Young, healthy individuals with families typically need enough life insurance coverage to pay off a home mortgage and other outstanding debt and provide some income replacement for their spouse and children.
You may also want life insurance to fund your children’s education and other future plans. Under most circumstances, submitting to the medical tests and underwriting process will be the best option for obtaining appropriate life insurance that achieves your goals and gives you peace of mind.
How to Find No Medical Exam Life Insurance
Even if you need life insurance fast and no medical exam coverage is your only alternative, you still need to do your homework. Get quotes from multiple insurance companies and make sure that the death benefit and premium amount are satisfactory for your needs and budget. Also, be sure to check out the financial stability of your insurance carrier. You can review insurance company ratings through A.M. Best, Standard & Poor’s, and other financial information services.