No Medical Exam Life Insurance

The right insurance policy is an important piece of your financial protection puzzle, but getting it can be a drag. The application process takes up to 8 weeks and usually involves a medical exam. And that medical exam usually involves taking blood. Ack!

If you’re looking for life insurance with no medical exam and no waiting period, there are a few options available:

• If you’re fairly young and healthy (i.e. at a low risk of actually dying while you hold the policy), you may qualify for something called simplified term life insurance. We’ll discuss this in depth below. Read on!
• If you’re a senior with health issues and are looking for a policy to help cover end-of-life costs and outstanding debts, there’s a different category of life insurance policies for you called final expense life insurance that will allow you to bypass the medical exam. For more on those policies, go here.

• Just like regular term life insurance, simplified term is a life insurance policy that protects your family for a set period of time and then expires—usually 10, 20 or 30 years. You can adjust the policy size to suit your family’s needs, but coverage for simplified term usually maxes out at $250,000.
Unlike with a regular life insurance application, which involves a medical exam to assess your risk, insurers ask you detailed questions and use third-party data such as prior medical records, your driving record, etc to assess your risk level. This information substitutes for the medical exam.
• Not everyone will qualify for simplified term life. In order to be eligible, the insurance company must consider you low-risk enough to allow you to skip the medical exam.
• The policyholder pays monthly or annual premiums to keep the policy in force.
• If the policyholder dies while the policy is in force, the coverage amount (grimly called a “death benefit”) is paid out in one tax-free lump sum to the beneficiaries named in the policy.

They say there’s no such thing as a free lunch—and unfortunately the same is true with life insurance. For the added convenience speed of getting your life insurance policy quickly and without any needles along the way, you’ll probably pay extra.

How much extra depends on a number of factors—your age, gender, overall health history, etc. And in general, the more coverage you want, the more you’ll pay versus a traditional term policy for the same coverage amount. For instance, here’s a look at what an average 30 year-old male (non-smoker) would pay for a 20-year simplified term policy vs fully underwritten (traditional) term policy:

In some cases, e.g. for someone who wants a small coverage amount and isn’t in tip-top health, you’ll actually save a few dollars by avoiding the medical exam and going with simplified term. For instance, if the hypothetical 30 year-old mentioned above was a smoker, here’s what the price comparison for a 20-year policy would look like:

But in most circumstances, you can expect to pay more for a simplified term policy than you would for a fully underwritten (i.e. regular) term life insurance policy.

If you’re looking for a small coverage amount and you’re someone who will actually get a better rate through a policy that lets you skip the medical exam, then—win win! Otherwise, unless you absolutely can’t stand the idea of taking a medical exam and giving blood, you’re probably better off with a fully underwritten term life policy.

Note: If you have a serious health issue that’s been diagnosed, a simplified term life insurance policy isn’t a way to get a better rate by lying about it or intentionally omitting it from your application. For starters, the insurer will probably find it when they examine your health records. Second, if you should pass away and are found to have been intentionally deceitful on your life insurance application, your insurer could deny your claim based on insurance fraud, leaving your family high and dry. Honesty is always the best policy when applying for life insurance.

Riders are additions or modifications to a life insurance policy that give the policyholder either flexibility or extra coverage options. Availability varies by carrier, but you may want to consider these common riders along with a no medical exam insurance policy:

Acceleration of death benefit rider

In the event you become terminally ill, this rider will allow you to access part or all of the death benefit cash and use it to pay for certain expenses like medical care. A terminal prognosis usually means being diagnosed with 12 months to live, but can be 24 months in some states.

Disability income rider

Provides monthly payments to replace your income if you become disabled or unable to work. This acts similar to disability insurance, so some shoppers choose to add it as a rider to their life insurance instead of buying a second policy to protect against disability.

Term conversion rider

Allows you to convert a term life insurance policy to a permanent, or whole life insurance policy at the end of the term. This is a common rider in term life insurance policies.

Level Term Life Insurance

If you’re willing to jump through a few more hoops and take the medical exam, your best bet is a level term life insurance policy. The level part means that your premium payments will stay level and the cost won’t increase as long as you keep the policy. And since you agree to be fully inspected, it’s cheaper than a no medical exam term life insurance policy.

Return of Premium Life Insurance

Offers you a money-back guarantee on your term life insurance: If you outlive the policy, the premiums you have paid over the life of the policy will be returned to you.

Whole Life Insurance

Think of whole life insurance as a term policy with an added savings component. Rates are higher, but a portion of your premiums go toward a savings account that builds cash value and gets transferred to your beneficiaries at the end of your life. Whole life insurance requires that you keep paying for the policy your entire life if you wish to keep it. It’s a big commitment, with a lot to consider. Visit here to learn more.