What Is No-Exam Life Insurance?
No-exam life insurance gives you coverage and a death benefit without submitting to a medical exam.
Published November 25th, 2020
You can purchase life insurance online without undergoing a medical exam: the insurance company will proceed with a simplified underwriting that uses information about your age, health, and other factors to determine your premium.
This type of underwriting typically yields more expensive premiums for younger and healthier people. Yet, about half of Americans prefer simplified underwriting because they don’t have to give blood and urine samples or even talk to a person face-to-face. People who are afraid of being rejected for life insurance due to an underlying condition may be more inclined to choose no-exam life insurance.
Application process for a no-exam life insurance policy
A no exam insurance policy doesn’t require a medical examination: you will not be asked to visit the doctor’s office for a medical check. However, you are required to fill out an application questionnaire and will still be asked questions about your health and lifestyle. You absolutely must be thorough and as detailed as possible when answering these questions, to avoid the risk of your policy being voided and your coverage declined or decreased.
Another critical point to remember is that you will still be subject to an underwriting review. Underwriters will review all your documentation and provided information carefully, to assess the risk of insuring you. Since the medical and health information is limited, insurance underwriters will pay extra attention to other data points to determine your eligibility, such as driving records, insurance history, occupation, hobbies…
Types of no-exam life insurance policies
There are two types of no-exam life insurance policies: simplified issue and guaranteed issue.
With a simplified issue policy, you have to answer a detailed application questionnaire that includes questions about your health and medical history, and your family medical history. You will also be asked to submit your medical records, but you are not required to undergo a medical exam.
Applying for a guaranteed issue policy is even simpler, as it requires answers to a just few questions about your health and your medical history. It is a good option if you have pre-existing conditions and do not qualify for traditional life insurance or simplified issue policies.
How much does no-exam life insurance costs?
The premiums for no-exam life insurance are higher than for traditional policies because of the lack of a medical exam, and the coverage is usually capped at $300,000 to $500,000 for a simplified issue policy, and $25,000 or less for guaranteed issue policies.
In addition, many policies come with graded death benefits, meaning that the amount received by your beneficiaries is limited if you die in the first few years of the policy: in this case, they may receive an amount equal to paid premiums plus interest only.
Why choose a no-exam life insurance?
The main reason for choosing a no-exam policy is to get life insurance coverage when ineligible for traditional life insurance due to health issues or pre-existing conditions.
Guaranteed issue insurance is sometimes called a “no-questions-asked” policy: you will get coverage whatever your age and health status. It can’t be denied. Guaranteed issue is a type of permanent insurance: it lasts as long as you pay your premiums. Yet, these policies are capped and often come with conditions such as graded death benefits.
No-exam life insurance also offers greater convenience – no doctor’s visit, no medical exam, and faster approval. It’s a good option if you don’t want to or cannot not wait for the usual 4-6 weeks of underwriting process.
Is a no-exam insurance policy right for me?
These no-exam life insurance policies are not for everyone. The high premiums are generally not worth the convenience of not going to the doctor’s for the average person. If you are young, healthy, or need a high amount of coverage, a no-exam policy is probably not the right type of life insurance for you.
If you are older and only need a small amount of coverage, a specific type of no-exam life insurance called a final expense policy might be the right choice for you. Keep in mind a final expense policy generally does not exceed $25,000 as death benefit and does not gain cash value or interest. It is usually used to help cover end-of-life expenses, such medical bills or burial costs, but can also help you leave a small legacy behind for your children or grandchildren.
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Group life insurance
Another version of no-exam life insurance is group insurance. These policies usually don’t require medical exams because they are given to you by an employer at a very low cost. It is rated at a group level, so you are not subjected to standard underwriting guidelines. These policies are generally very small, do not gain in cash value, and usually not transferable once you leave your current employer. Relying on group life insurance is not a prudent option for many people.
When considering a no-exam life insurance policy, think about what you would stand to benefit from it. Is it truly worth the higher premiums to not have to go to the doctor’s? Are you getting the absolute best policy for your needs?
If you are considering purchasing no-exam life insurance, it is essential to consider all your options and talk to an agent you trust about the specific coverages you may need or want. Remember that life insurance can provide you with many different options and the sooner you purchase the right policy, the better off you will be!