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Traditional life insurance policies require applicants to undergo a medical exam in order to qualify for coverage. Many people hate the idea of the medical exam, either because they have pre-existing medical conditions or it’s simply inconvenient. Sometimes, these people end up forgoing life insurance. Don’t let that happen to you! Today, there are options for people who don’t want a medical exam: no exam life insurance policies. These types of policies allow you to get life insurance without the pesky medical exam.

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One note about no exam life insurance is that just because there is no medical exam doesn’t mean there won’t be any health questions. Certain applications include several health questions and also require a short phone call. The only type of no exam life insurance that doesn’t require any medical information is guaranteed issue life insurance. Guaranteed issue is very convenient but comes at a high cost. You can get a free quote here and read on to find out more. 

The main point of no exam life insurance, or any type of insurance for that matter, is that your loved ones will have the financial coverage they need in case the worst should happen and you die unexpectedly. This point is especially critical for owners of small businesses. Naturally, you want to soften the blow for your family’s finances in the unfortunate event of your passing.

How No Exam Life Insurance Works

No exam life insurance provides the same service as traditional life insurance, except the way it does so is different. Traditional life insurance requires an exam so that underwriters can pore over every detail of your health and then assess what risk you pose to the life insurance company. The risk being, what are the chances that you will die early? Underwriters make their assessments by comparing your health stats against millions of statistics. 

Smokers, for example, are considered higher risk than non-smokers across the board. Let’s say there are two people who are the same age, gender, and in the exact same health situation. The only difference is that one is a smoker. Insurance companies give the smoker higher insurance rates because smokers statistically have a higher rate of mortality

In general, the healthier you are, the lower your life insurance rates will be. You’ll also be able to qualify for a higher coverage amount if you are in good health. 

Types of No Exam Life Insurance

There are several types of no exam life insurance:

  • Simplified issue term 
  • Simplified issue universal
  • Level death benefit whole
  • Graded benefit whole
  • Guaranteed issue

Simplified Issue Term 

A term life insurance policy is one that’s only valid for a certain number of years, or term. Terms are usually sold in increments of five. This means you could purchase a policy for five, 10, 15, 20, 25, or even 30 years. Unlike whole life insurance, there is no cash value component of the policy. You simply pay a monthly premium in order to ensure that your loved ones will receive a death benefit in the event that you die. The policy is only valid if you pay your monthly premiums. Additionally, once the term ends, so does your coverage. 

No exam term life insurance is similar to traditional term life insurance. The application requires you to answer some health questions, but not a lot. In some cases, insurance companies will compensate for their lack of knowledge about you by gathering information from third party sources (with your permission, of course). These sources include the DMV, pharmacy records, previous life insurance applications, and credit checks. Coverage of no exam term insurance usually goes up to $500,000.

Simplified Issue Universal

This type of simplified issue policy has a similar application process to term, but this policy has a cash value component and lasts the policyholder’s entire lifetime (a type of whole life insurance). Also, this policy comes with extra flexibility since you can move funds between the death benefit and the cash value of the policy. With simplified issue universal, the premiums are fixed for life. Coverage can go up to $500,000.

Level Death Benefit Whole

This is another type of whole life insurance that’s easier to qualify for than simplified issue. However, because it’s easier to qualify for, the death benefit only goes up to $50,000. This type of insurance is usually chosen by people who have pre-existing medical conditions and would have a hard time qualifying for the other types of no exam life insurance. 

Graded Benefit Whole

Yet another type of whole no exam life insurance, graded benefit whole is designed for people with serious health issues. Because insurance companies grant these people coverage despite the high risk they bring to the insurance company, monthly premiums are higher than other types of life insurance. They’re not as high as guaranteed issue (see below) because of the graded death benefit. The graded benefit means that if the policyholder dies within the first two years after purchasing the policy, only a percentage of the death benefit will be paid out. The full death benefit only pays out if you have held the policy for more than two years. 

Guaranteed Issue 

Guaranteed issue is the only type of no exam policy that doesn’t require applicants to answer any health questions. Just apply and get approval immediately. That’s why people with very serious health issues or those who have been turned down for other types of policies usually purchase guaranteed issue. Since insurers take on a big risk by offering this kind of policy, premiums are very high and coverage only goes up to $25,000. 

Is No Exam Life Insurance Right for You?

If you hate the idea of a medical exam or have pre-existing conditions that could disqualify you from getting traditional coverage, no exam life insurance can be a good option. It’s quick and convenient. While these policies can be more expensive than traditional ones, prices are more competitive than ever due to the high demand. It’s worthwhile getting several quotes to make sure you get the best deal.

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