Is a no-medical exam life insurance policy right for me?

Is a no-medical exam life insurance policy right for me?

So you’re on board with the idea of life insurance. You know it’s a crucial part of your financial safety net, you need to to make sure your family is taken care of in case of the worst, and you know it’s the most affordable way to do that.

But about that medical exam...

It’s true that while applying for life insurance is easy, the medical exam can turn some people away. Whether it’s because it adds time to the process or they just don’t like the idea of a blood & urine test, the medical exam can be the biggest hurdle in getting life insurance coverage.

That’s where no-medical exam life insurance policies come in. Whether you’re getting a simplified issue policy or going through accelerated underwriting, you have options for skipping the medical exam altogether.

What is the medical exam?

Typically when you apply for life insurance, you go through the full underwriting process, where you’ll be classified based on how risky you are to insure (that is, how likely you are to die during the life insurance policy’s term). Part of that is the medical exam, during which you’ll be measured for vitals (height, weight, blood pressure, pulse) and provide samples of blood and urine for lab tests. This is to check your current health situation in the most complete way possible.

The medical exam itself doesn’t take long, 20 or 30 minutes usually, and you can schedule it at home or work on your time, for free. But it’s still an extra step for you.

A no-medical exam policy, obviously, skips this step. That means a quicker turnaround from application to in-force policy – and your family is protected that much sooner. There are two ways to skip the medical exam - with some important caveats to note.

Simplified issue life insurance

The "simplified" part of a simplified issue life insurance policy is skipping the medical exam. Beyond that, it works like a standard term policy: you apply for a policy of a certain face value and term, and the policy is in force until the term expires (or you stop paying your premiums).

Instead of taking the medical exam, you’ll instead fill out a health questionnaire regarding if you smoke, your health history, and so on. This allows you a little more wiggle room than if you went through the full underwriting process; applicants with less-than-spectacular health can get coverage they might not otherwise. Still, if you’re in particularly poor health, you may ultimately be asked to complete the medical exam.

Unfortunately, there are some limitations to simplified issue life insurance. They’re usually for lower coverage amounts (many only go up to $100,000) so you may not be able to get a policy that fits your needs. They’re also usually more expensive than comparable policies that go through traditional underwriting, since the insurer is taking on additional risk by not vetting your health as closely as they might have otherwise. That makes simplified issue life insurance an option that’s not ideal for most people, who can secure better rates through a traditional term policy.

For a full explanation of everything that simplified issue life insurance entails, see our guide here.

Accelerated underwriting

Simplified issue life insurance used to be one of the only ways to avoid taking the medical exam, and we’ve already discussed the (literal) cost you get for this convenience. Luckily, in recent years there’s been a more affordable alternative available with some insurers: accelerated underwriting.

Simplified issue life insurance is more expensive than traditional policies because the life insurance companies are skipping the critical step to fully evaluate your life insurance risk. But accelerated underwriting is more like a "fast track" option for regular term life policies at certain insurers. And it’s available for the healthiest applicants and there’s no extra charge for it (meaning you get the same fully-underwritten rates as if you had gone through the medical exam). That means all of the same benefits of a traditional policy – namely the affordable protection it offers – without the long underwriting times.

Insurers are able to do this by using readily-available third party data rather than lab tests and exam results. That means things like a motor vehicle report to check your driving record, requesting information from the Medical Information Bureau, a prescription drug check, and a labs history check, but no physical exam or blood test. If the insurer has any questions, they may still request an attending physician statement from your doctor, but that’s more of a last resort move, since the whole point of accelerated underwriting is to avoid the more time consuming aspects of life insurance applications. Essentially, the life insurance company has decided that data can replace blood & urine for underwriting young, healthy applicants.

However, if anything comes up in the database checks (e.g., you have a prescription history that indicates a medical condition you didn’t disclose on the application), the insurer can route you through the regular process and have you take the medical exam. As a rule, accelerated underwriting is available only to people who would qualify for the top two health classes.
PolicyGenius offers accelerated underwriting policies from Banner, Lincoln, and Principal. If your priority is getting through the application process sans medical exam, start there. Be sure to check out our life insurance carrier reviews to get all the details on these and other carriers.
For the full lowdown on accelerated underwriting, check out our primer here.

Who should use no medical exam life insurance?

Not everyone will be able to take advantage of a no medical exam life insurance policy – for instance, if you’re applying with an insurer who doesn’t offer accelerated underwriting, there’s not much you can do about it, and certain family history conditions like cancer may automatically disqualify you – but there are two groups of people who might be particularly interested in going down this path.

First are people who simply don’t want to wait. The underwriting process can add a few weeks to the application time for a life insurance policy, particularly if you can’t schedule the medical exam right away because of your busy schedule. If you’re not interested in waiting several weeks for your policy to go into force, using a simplified issue policy or, preferably, a policy that goes through accelerated underwriting could be the ticket. But remember that you’re paying more for a simplified issue policy...and you may not qualify health wise for accelerated underwriting.

The other group would be people who can afford to potentially pay more than they would for a traditional policy. This is particularly the case with simplified issue life insurance. Since the insurer is taking on more risk by not evaluating your current medical condition directly, like they would with a medical exam, you’re paying for the convenience. As mentioned, accelerated underwriting usually offers the same rates as fully underwritten policies, but always be sure to comparison shop: especially for policy amounts higher than $500,000, insurers may be wary and charge higher rates for allowing you to skip the full underwriting process.

Skipping the medical exam can be good, but if you do have to take it, don’t let that keep you from buying life insurance. It’s a purchase that you make infrequently but can be literally life changing for your family if it’s needed; a few extra steps shouldn’t turn you off to its benefits. To find out the best way to apply for the life insurance policy that’s right for you, talk to one of our licensed agents today.