No exam life insurance used to be a type of life insurance that people got only as a last resort, but today, that’s changed drastically. Today, no exam life insurance is becoming an increasingly popular option and there are more insurers than ever that offer it. Whereas traditional life insurance policies used to be considered less expensive and more reliable, there are currently plenty of no exam options that debunk those old stereotypes.
Before getting into the reasons for buying no exam life insurance, let’s discuss the different types.
There are 3 major kinds of no exam life insurance policies:
- Accelerated underwriting
- Simplified issue
- Guaranteed issue
Below we’ll discuss what each kind offers and which types of people they are best suited for. If you’d like to speak to an insurance advisor about your personal situation, you can contact the insurance experts at Sproutt.com.
Accelerated Underwriting Life Insurance
Accelerated underwriting is a specific kind of traditional life insurance policy that offers certain applicants the option to skip the medical exam. Applicants that usually get this option are relatively young and in good health. However, just because there is no medical exam doesn’t mean the policy isný fully underwritten. With accelerated underwriting policies, insurance companies collect your information from third-party sources, with your permission, of course. These sources include pharmacy, driving, medical, and credit records. Since these policies are fully underwritten, they are the least expensive type of no exam policy.
Simplified Issue Life Insurance
Simplified issue is a form of term life insurance, which means you purchase it for a specific period of time — 5, 10, 15, 20 years, etc. While no medical exam is required, insurers do require applicants to fill out a questionnaire with some health questions. The application is then underwritten quickly and approval is usually granted within a few days.
For this reason, many people who need life insurance quickly — for a divorce settlement or SBA loan — choose a simplified issue. However, not all applicants are approved, since medical conditions are taken into account.
Guaranteed Issue Life Insurance
Guaranteed issue is a form of whole life insurance, which means there is no expiration date on the policy. Unlike simplified issues, guaranteed issue applications don’t ask any health questions, don’t include underwriting, and everyone within the age limit (80 or 85) is approved no matter what. Click here to learn more about Medicare Nationwide However, since approval is guaranteed, insurers protect themselves in 3 main ways:
- Coverage is limited to $25,000 or $50,000
- Premiums are high
- If the policyholder dies within two years of purchase, only a portion of the death benefit is paid out.
Guaranteed issue is usually the last resort for people who have been denied traditional coverage but still want to leave something behind for their loved ones. You can read the Sons of Norway life insurance review for more details.
The Top 5 Reasons to Buy No Exam Life Insurance
Now that you know what’s available, we’ll discuss why people choose no-exam life insurance over other types of insurance.
1. Convenience
Skipping the medical exam means no waiting for appointments and no hassle. Convenience is the main reason people choose no exam life insurance.
2. Speed
All types of no-exam life insurance offer a quick approval time, ranging from immediate to within a week. This is much quicker than traditional life insurance, which can take anywhere from 4-8 weeks to grant (or deny) approval.
3. Easier Approval
People who would be rejected for a traditional life insurance policy will have an easier time getting approved for no exam life insurance, since health bears less (or no) weight on the decision to approve an application.
4. Fear of needles
People who have a real fear of doctors and/or needles choose no exam policies because they get to avoid invasive checkups and blood tests.
5. Available riders
Many no exam policies come with built-in riders, or added benefits to the policy. For example, some no exam policies include living benefits, which is a rider that allows the death benefit to be paid out before the policyholder actually dies.
Bottom Line: You Have Plenty of Options
For all the reasons listed above, no exam life insurance is consistently becoming a stronger presence on more people’s radars. The fact that pricing today is more competitive than ever also makes these kinds of policies more appealing. In some cases, the rates for a no exam policy can be on par with those of a policy that does require a medical exam. Guaranteed issue policies are the only type that tend to cost more consistently. The bottom line is, if you need life insurance but don’t want to undergo a medical exam, there are plenty of options for you to choose from.