|Summer 2022 Volume 15, Number 2|
Is No-Exam Life Insurance Right for You?
Getting life insurance can be complicated and time-consuming. But not always.
To get life insurance in most cases, you must undergo a medical exam, since this is how the insurer determines the level of risk and calculates the premium. However, you may be interested in no-exam life insurance, especially if you’re in good health and don’t want to undergo the rigors of a full exam.
How Do No-Exam Life Insurance Policies Work?
Usually when you apply for a life insurance policy, you must undergo a relatively simple medical exam in which:
If you require more coverage or are over 50, additional tests might be required, such as an EKG. If you’re healthy, you’ll get better rates on your policy, but it does slow the process down.
Accelerated Underwriting Policies
With an accelerated underwriting policy, the insurance company analyzes the information you provide. It also sources data from third parties and uses special algorithms to determine if you are eligible. This type of policy has the convenience of a no-exam life insurance policy while offering the advantageous rates of traditional life insurance.
Simplified-Issue Life Insurance
With the simplified-issue life insurance policy, you have fewer questions to answer. The insurer also doesn’t use as many resources to collect data about you. However, rates tend to be higher and coverage limits are lower than the accelerated underwriting policy.
Guaranteed Issue Life Insurance
As the name implies, you are guaranteed to get life insurance with this type of policy. You won’t have to answer any questions, and you won’t undergo a medical exam. However, coverage is limited – generally around $25,000 – and the premiums will be much higher than a traditional policy.
Tips on Getting No-exam Life Insurance
While getting no-exam life insurance is not as complicated as a traditional policy, it still pays to consider certain factors beforehand.
Determine How Much Coverage You Need
A no-exam life insurance policy is undoubtedly attractive because of how easy it is to get. First, however, consider the amount of coverage you need. It’s probably not going to work for you if you need higher limits. And if you want to cover a longer timeframe, you might need more insurance than these policies provide.
Be Certain You Can Get the Policy
Generally, you need to be very healthy. If you aren’t, you stand a good chance of being denied. This will go on your insurance record and create problems when you apply for insurance in the future.
Look Beyond Price
When choosing a policy, don’t just look at the price. There may be valuable policy options, such as the ability to convert a term life policy into a permanent policy. Another feature to consider is accelerated death benefits, which allows you to gain access to your death benefit if you fall ill with a terminal disease.
You must be honest in your application or risk being rejected or having any future claims denied. Insurance companies have plenty of technology and will check your information for accuracy, including your driving record, prescription drug history, and how you answered questions on previous applications.
Don’t Despair at a Rejection
If you are rejected, don’t despair. You might think that you have no chance of getting a life insurance policy, but you need to keep searching. Your best option is to work with an experienced agent.