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No Exam Life Insurance

Think all life insurance applications involve comprehensive medical exams? They don’t. If you’re worried that your health or lifestyle could bar you from life insurance coverage, read on to learn more about exam-free options. We’ll break down what it means, as well as how it impacts what you’ll pay and who might want to consider these no-medical exam life insurance plans.

Find out now: How much life insurance do I need?

No-Exam Life Insurance: The Basics 

No-exam life insurance is also known as simplified life insurance or nonmedical issue life insurance. Cancer patients, cancer survivors, heavy lifelong smokers or the obese might all have given up on the idea of getting life insurance coverage. Ordinarily it would be tough for anyone with serious health risks to get life insurance coverage, but simplified coverage is the life insurance industry’s way of saying “Don’t ask, don’t tell.”

With simplified life insurance, you won’t be made to give blood or urine samples, but you’ll pay for the privilege of secrecy. While there’s no medical exam involved, you will have to answer some questions about your personal and family medical history.

The No-Exam Premium

The good news is that life insurance without a medical exam requirement is available. The bad news is that it’s generally more expensive. When someone applies for, say, a 20-year term life insurance policy, the life insurance company really doesn’t want that person to die within the 20-year term. The more likely the applicant is to die, the more the insurance company will charge in premiums, to offset the risk that the applicant will die and trigger a big payout.

If you apply for a no-exam life insurance policy, the insurance company interprets that application as a signal from you that you might not pass a medical exam. That makes them think that you’re a high-risk applicant, and they’ll charge you accordingly.

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Not for the Healthy

No matter how much you dislike undergoing medical exams, you shouldn’t opt for no-exam life insurance if you’re in good health. The insurance company will assume that anyone who applies for no-exam insurance must have a health condition to hide – and charge you higher premiums.

Plus, even if you don’t undergo an exam you’ll still have to answer questions about your family medical history. You could get charged extra based on your dad’s diabetes, even if you follow a strict no-sugar diet. If you’re in good health, why not reap the rewards? It can be a good idea to apply for life insurance that requires a medical exam, and when it’s over you’ll likely have lower premiums to show for your trouble.

If you have a very healthy lifestyle, you may even be eligible for preferential premium rates. Why pay more expensive premiums when you could be paying discounted ones?

Check out our 401(k) calculator.

The Need for Speed

So far we’ve talked about the added cost that’s typically associated with no-exam life insurance. But there is one big advantage to simplified life insurance, and it could be as useful to the healthy as to the sick: speed. Simplified life insurance offers much faster underwriting, so if you need life insurance right away then no-exam life insurance could be your best bet. You won’t need to wait for weeks to schedule an exam, or for your blood test results to come through. You could get coverage as quickly as 24 hours after you apply.

Why would someone need life insurance in such a hurry? Sometimes, judges order divorcing parents to buy life insurance to secure a child support obligation. Sometimes, people find themselves with a new mortgage or a new baby and no life insurance to protect their spouse from financial liability. In any of these cases, it’s a good idea to secure life insurance coverage ASAP.

Bottom Line

There are many life insurance companies that offer no-exam policies. The catch? These policies come with a cap on coverage. Without knowing the details of your health, life insurance companies aren’t willing to insure you for huge sums. So while a person could get over a million dollars in coverage from a regular life insurance policy, that same person might only be eligible for $250,000 in coverage from a simplified life insurance policy. In rare cases, you could get life insurance with no medical exam and no health questions. Those policies usually have even lower caps on coverage.

If you’re drawn to the idea of no-exam life insurance because you think submitting to a life insurance medical exam will be too inconvenient, remember that most life insurance companies can send a paramedical professional to your home or office to complete the brief exam. You can work with the insurance company to find a time that fits your schedule.

Still not sure if you should go with a no-exam policy or take your chances on a medical exam and blood test? The next time you visit your primary care physician, consider asking your doctor to give a general assessment of your health. He or she might be able to tell you if you would pass a life insurance medical exam.

But before you start down the road to coverage, it’s a good idea to make sure you need life insurance in the first place. SmartAsset is here to help.

Photo credit: flickr

Amelia Josephson Amelia Josephson is a staff writer covering financial literacy topics at SmartAsset. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.

Comments

Quality T 2 years ago
No medical exam term life insurance might sound like a great thing. You have serious health problems, you think maybe you can skirt being denied coverage by going the no-exam route. Not so fast. Those "questions about your personal and family medical history" need to be answered, truthfully. The kicker is that if you can pass that, then you can pass standard life insurance exam, thereby saving a small fortune in annual premiums. Do yourself a favor, standard term life insurance is inexpensive (check out the low rates at QualityTermLife); the medical exam is quick and easy, done at your convenience in your home or office. And if you have health problems, you might be surprised to find that many stable conditions won’t cause denial of coverage, or even raise your rates that much. Life insurance companies are competing for customers. They understand that if you are unlikely to die prematurely from your condition then you are a good bet for their business.
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