Life insurance can be a confusing purchase. There are so many different policies available on the market: whole life insurance, variable, universal, variable universal, variable premium, stranger originated, and many others. Some require a health exam, but there are also no-exam life insurance policies.
When it comes to deciding the policy that is best for you, the main question is, “Do I need to take a medical exam prior to approval for coverage?” To some, this is a scary question. No one has had a clear bill of health their entire life, and some of us have had worse luck than others. Unfortunately, certain chronic illnesses and other diseases send red flags to the insurance underwriter making you undesirable to insure. They will either deny you
Unfortunately, certain chronic illnesses and other diseases send red flags to the insurance underwriter making you undesirable to insure. They will either deny you coverage, or charge you much higher premiums. For those people who may not necessarily pass an insurance-required medical exam, there is always the option to choose no-exam life insurance. No-exam life insurance is “a type of life insurance that waives the need to applicants to go through the common medical exams that most life insurance companies use.” This is different than a policy that is offered by your employer and does not require an exam. Rather, it is a private policy that you purchase on your own. Before purchasing a no-exam policy, it is important to consider the pros and cons.
Health Issues: You may be in a situation right now where you are facing higher health insurance costs, lost time at work, and even potential planning for end-of-life decisions. Having a no-exam policy may be your best and only option for helping your loved ones pay your medical expenses and funeral and burial costs once you die. You are not only providing your self with peace of mind, but your beneficiaries as well.
Time: If you are in a rush to get coverage as soon as possible, or don’t like to spend the time and hassle that generally accompanies a physical exam, purchasing a no-exam policy is much quicker. In fact, you can purchase one in person at an insurance agent’s office or online. It begins as soon as you are approved. There is no need to re-arrange your busy schedule to fit in another doctor’s exam.
Easier: When you fill out the forms for life insurance, you will still be asked about your health history and medical conditions, but that’s it. There is no physical exam.
It’s better than nothing! Many people claim that they would prefer having life insurance, but haven’t had the time to purchase anything. With a no-exam policy, the application and approval time make it a quick and easy way to get coverage.
Cost is a factor: Unfortunately, not taking a medical exam means that your insurer has less information about your health. This means that they are taking on a bigger risk by providing you with a policy and therefore are justified in charging you higher premiums.
If you are still quite young and are trying to decide on the type of life insurance policy to buy, there is little cost difference between a no-exam and exam policy. So, if you need coverage quickly for travel purposes, or as part of a loan agreement, this may be a viable option for you.
Policy Options: If you are in good health and are choosing between policy options, insurance that requires an exam will provide you with higher coverage at a lower cost. Sometimes, no-exam policies are capped, meaning that a $250,000 policy will cost you about the same as a $400,000 exam-based policy.
Fewer Benefits: The majority of no-exam term life insurance policies lack the clauses for conversion and renewal. This means that when the plan ends at the conclusion of the term, you might not be able to convert to a permanent life insurance plan or renew the term. Make sure you read the fine print before purchasing.
Restrictions: If you are over 50, participate in high-risk activities, or work for a certain industry, you may not be able to obtain this type of insurance at all.
Be sure to be honest when filling out the insurance form on this type of policy (or any policy for that matter). Your policy will still be underwritten, which means that the insurer will check the Medical Information Bureau, prescription report, and motor vehicle report. Even though the insurer has less information about you doesn’t mean they can’t terminate your policy if they have found that you misinformed or misled them. Speak with an independent insurance agent today to find out what the best policy option is for you. Sometimes, insurance providers will advertise no-exam life insurance when they are really just selling accidental death policies. This would mean that the policy would only provide coverage in the event that your death occurred because of an accident. Having the knowledge and trustworthiness of a local agent help you to read through the fine print of these various policies can be quite beneficial.
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Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
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