Life insurance is one of the most important and worthwhile purchases you can make, but many people put it off because they don’t want to undergo the exam part of the application.
That’s why many life insurance companies have started offering easy-to-apply-for no exam life insurance. These policies let people avoid the medical exam and still get life insurance.
What’s so bad about a medical exam?
A medical exam for life insurance usually takes 30 minutes, during which a paramedical professional will collect blood and urine samples and measure your heart rate and blood pressure. While there’s nothing wrong with a medical exam per se, many people have an aversion to it. This is usually for one of several reasons:
- They’re afraid of needles
- They don’t have time
- They’re worried that the exam will reveal serious medical issues and they’ll be given very high monthly life insurance premiums
With regard to the last reason, the way pricing for life insurance works is that the healthier you are, the lower your monthly premiums are. The more health issues you have, the higher your premiums will be. If you have very severe medical issues, you may be denied coverage entirely. Therefore, many people who have some health issues and are scared of getting slapped with high premiums turn to no exam life insurance policies.
In some cases, no exam policies can be very pricey (see below), but in other cases, the cost can be quite reasonable. Click here to get a free quote.
Why are some no exam policies expensive and others not?
The reason for the discrepancy in policy costs is that there are different kinds of no exam policies. The two most popular are simplified issue and guaranteed issue.
Simplified issue life insurance is the kind that doesn’t need to be that expensive. It’s partially underwritten, which means that some health questions are asked, but not as many as you would find on an application for traditional life insurance. Since it’s partially underwritten, insurers know more about each applicant and can come up with a more accurate assessment of their health. This will directly affect how low or how high premiums are.
Other things that influence premiums are how much coverage you get and how long the term is. Simplified issue is a type of term life insurance, which is usually sold in increments of 5 years. Many people determine the length of their term via certain milestones, like paying off a mortgage or putting your last child through college. For example, if it will take 20 years to pay off your mortgage, you need a 20-year life insurance term.
This is the type of no exam life insurance that has the reputation for being very expensive, and for good reason. Anyone, regardless of health issues, can be approved for guaranteed issue coverage on the spot. No medical exam, no health questions, nothing. The catch for all this convenience is that monthly premiums are very high.
But the high monthly premiums are only due to a convenient application process. They’re due to the fact that the insurance company grants coverage to people who they know nothing about. The high monthly cost is a way of offsetting the risk they’re taking. This makes guaranteed issue a policy that’s better suited for people who are older or who have serious health issues and can’t get approved for any other kind of life insurance policy.
Guaranteed issue, as opposed to simplified issue, is a type of whole life insurance policy, so there’s no expiration date. Factors that affect the cost of monthly premiums include age, gender, and amount of coverage. However, because of the high risk associated with this type of insurance, most insurers only grant coverage up to $25,000.
Can you afford no exam life insurance?
The question of affordability largely depends on each individual’s situation. Those who are young and in fairly good health can find great deals on simplified issue, but others who have a serious disease might not be able to qualify. In the latter case, guaranteed issue may be their best option, and that will always be more expensive than simplified issue.
No matter which type you choose, getting a quote is a good way to know if this type of policy is within your budget. If you’re not happy with the quote you got, you can do some shopping. While many carriers offer similar products, they don’t all offer the same prices. Since buying life insurance is a pretty big deal, take your time checking out different no exam policies from various providers so you can find the best policy for you at the best price.