No exam life insurance is a type of life insurance policy that you can get without the need to undergo a medical exam as part of the application process. Whereas it used to be considered a less effective option, today it’s become more popular among many different types of people.
Specifically, no exam life insurance is ideal if you need life insurance quickly, if you have a fear of needles, minor health issues, or it’s been two years since your previous medical checkup.
Need Life Insurance Quickly
Traditional life insurance policies typically take between 4-6 weeks to get, whereas you can be approved for no exam life insurance immediately, in a few days, or a few weeks. Since the approval time is so fast, no exam life insurance is the life insurance of choice for those who need to secure an SBA loan, finalize their divorce settlement, or for people who simply want to get the entire matter over and done with.
Fear of Needles
Fear of needles, or needle phobia, is a fear of needles used in medical procedures. It was recognized in 1994 in the DSM-IV and is one reason why people can’t bear the thought of applying for life insurance that requires a medical exam.
Minor Health Issues
If you have minor health issues, you may not get the highest health rating when you apply for life insurance. This means that you won’t get the best rates. In fact, if you get put into a lower life insurance class for standard life insurance, you can end up paying more than you would for no exam life insurance. This is another reason people choose the latter option.
Over Two Years Since Your Previous Medical Exam
If you haven’t had a medical checkup in the past two years, underwriters view that as a sign that you’re not serious about your health. This can lead to higher premiums. Not having a recent medical checkup also means that if you go for an exam as part of your life insurance application, you’re likely to see some unpleasant surprises in your blood work. No exam life insurance helps you avoid these issues.
Applying for No Exam Life Insurance
There are different types of no-exam life insurance, but the application process is fairly similar for each. Most applications can be submitted completely online, although in some cases, you might be asked to have a phone interview. The conversation should last between 20 and 30 minutes, and the life insurance representative will ask about:
- Your current health
- Medical history
- Tobacco use
- Profession
- Lifestyle
For some types of no exam life insurance, the insurer will require underwriters to perform database checks. With your permission, underwriters will request information from the Department of Motor Vehicles, your pharmacy, and the MIB, which stores previous insurance applications. By gathering information from these databases, insurers seek to cover their risk by uncovering as much as possible about you.
Some no exam life insurance policies grant approval immediately. These are the types that don’t require any health information. The types that do require a phone interview and database checks usually take a little longer, usually no more than a few weeks.
Types of No Exam Life Insurance
There are four main types of no exam life insurance:
- Simplified issue
- Graded benefit
- Guaranteed issue
- Final expense
Simplified Issue
Simplified issue is the most common type of no exam life insurance. It’s called a simplified issue because the underwriting is simpler than traditional life insurance policies. This is the life insurance that requires you to provide some health information and also gather information about you from various databases.
Insurance carriers have realized that many people are put off by the long application process of traditional life insurance, including the medical exam, and they offer simplified issue as a realistic alternative. People who are relatively young and in good health can get very competitive rates, similar to those offered by traditional policies.
Graded Benefit
The graded benefit is a good choice if you’ve applied for traditional life insurance and have been denied. The main point of graded benefit life insurance is that the death benefit will only be paid out in full after two or three years of policy purchase. If the policyholder dies before the waiting period is over, only a percentage of the death benefit will be paid out.
To qualify for this kind of life insurance, you’ll need to answer a few “knockout questions,” like whether you have a terminal illness or HIV/AIDS and whether you live in a nursing home, hospital, or hospice.
Graded benefit policies tend to be more expensive than simplified issue policies, but for people who have been turned down, this is sometimes the only option. The benefit of a policy like this is that you get the coverage you need, as long as you outlive the waiting period.
Guaranteed Issue
Guaranteed issue is a type of life insurance that’s considered a last resort. If you’ve been turned down by all other life insurance options, chances are you can get approved for a Guaranteed issue. When you apply, no health questions are asked. If you’re under the age limit, you can be approved.
Similar to graded benefit, guaranteed issue policies don’t pay out within the first two years. The difference is that guaranteed issue policies will only issue a refund of premiums, not even pay a percentage of the death benefit.
Guaranteed issue is the most expensive type of life insurance, but approval is guaranteed.
Final Expense
The final expense is a type of life insurance whose sole goal is to cover the funeral and burial costs of the deceased. These policies usually do not have a waiting period, and coverage is modest and priced to cover end-of-life needs.
If no exam life insurance sounds like it is just what you’re looking for, don’t wait another day to look into it. Since approval can be granted immediately or within a few weeks, you won’t have long to wait before you get the peace of mind you crave.
