Your Questions About No Exam Life Insurance Answered Here
Before buying life insurance, it’s important to research the different types out there. While fully-underwritten life insurance policies have traditionally been the most popular, today, no exam life insurance is growing in popularity. The reason is simple: no exam life insurance is extremely convenient and easy to get.
What is no exam life insurance?
Traditional life insurance policies require a medical exam as part of the application process. The exam usually takes 30 minutes, and then all the information is sent to underwriters at the life insurance company. The underwriters assess your health details and determine what rating to give you. People who are generally healthy get a high rating and low monthly premiums, while people who have some health issues get a lower rating and higher monthly premiums.
No exam life insurance allows you to bypass the medical exam entirely. Some types of policies require you to provide some health information and then undergo partial underwriting, while other policies don’t require any health information and approval is immediate.
People who generally apply for no exam life insurance include those who:
- Have several minor health issues or serious ones – People who have several health issues, minor or major, are likely to be given a low rating and high premiums for traditional insurance. In some cases, health issues can be so serious that they are denied coverage altogether. In either situation, no exam life insurance provides an alternative that can be less expensive or at the very least offer coverage when a traditional policy won’t. Click here to get a free quote for no exam insurance.
- Need life insurance quickly – Fully-underwritten policies take 4-8 weeks to determine whether applicants are eligible for coverage. With no exam policies, you can find out immediately or within a few days whether you qualify. The difference in wait times depends on what type of policy you apply for.
- Have needle phobia – The medical exam includes a blood test, which is a deal-breaker for people who are diagnosed with needle phobia, extreme fear of needles.
- Want convenience – Fully-underwritten life insurance policies are a hassle to apply for, from the medical exam to the long wait time for approval. No exam life insurance does away with all these inconveniences and offers an easy application and quick approval.
Why doesn’t everyone apply for no exam life insurance?
Since no exam life insurance is so convenient and easy to apply for, how come it’s not the most popular choice? The reason for this is twofold: no exam life insurance policies can often (but not always) come with a higher price tag than traditional policies, and coverage amounts are usually limited.
Who should apply for no exam life insurance?
People who usually apply for a no exam life insurance policy are those who:
- Are scared of needles
- Have several minor health conditions or a major health issue
- Need a policy quickly, either for an SBA loan, divorce settlement, or travel plans
- Are willing to pay more for the convenience of an easy application process
How much no exam life insurance should you purchase?
There are two main types of no exam life insurance: guaranteed issue and simplified issue. Guaranteed issue is a type of whole life insurance and coverage only goes up to $25,000 or $50,000. Simplified issue is a type of term insurance that offers coverage up to $1 million.
First, you need to decide which type is right for you. Guaranteed issue is usually considered a last resort because coverage is limited and premiums are very high. In many cases, this type of life insurance is used as a kind of final expense insurance to cover the cost of funeral/burial. If this is the case, you can determine how much you expect your final expenses to be (not the most pleasant thought) and then decide how much coverage to get.
Simplified issue is the more popular type of life insurance, since it’s term, which is almost always less expensive than whole, and some health information is required in order to get approved. This means that insurers know a little bit about you and can determine your premiums more accurately. To determine how much coverage you would need from a simplified issue policy, consider the following:
- Do you have any outstanding loans?
- How much would your loved ones need to live on if you’re not earning a salary?
- Do you still need to pay for your kids’ college?
Taking these kinds of factors into consideration can help determine how much coverage you need.
The bottom line
No exam life insurance is a good option for various types of people, including those who are scared of needles, need life insurance quickly, or have medical issues. However, because there are some drawbacks, it’s important to do your homework and see if no exam life insurance is indeed the best choice for you.