Everything you need to know about no-medical-exam life insurance
Majority of life insurance policies work in the same way. You pay a premium — monthly or yearly — to ensure that your loved ones or chosen beneficiaries receive financial support in the event of your death.
However, one of the main differences between varying policies is the inclusion of a medical exam or not. If you’re considering opting for no-medical-exam life insurance, here’s some of the things that you should know.
You may be charged a higher premium
The purpose of a medical exam, when applying for life insurance, is to determine the level of risk you’ll be insured for. The insurer can use the information to further understand any health issues you may or may not have, and the effect these issues may have on the likelihood of an early death. The exam is carried out by a medical professional employed by the insurer, and will usually consist of a blood test, a urine sample, and check of your height, weight and vitals.
You do have the option of choosing no-medical-exam life insurance, which as the name suggests, does not involve the processes mentioned above. In this circumstance, you usually have to complete a questionnaire about your health, which the insurer will use to inform the policy. This could also involve referring to your past medical records.
A questionnaire is not as extensive as a medical exam. Therefore, the insurer cannot infer the level of risk as accurately. As a result, you are likely to be charged a higher premium than a policy involving a medical exam.
It is always worth fully researching this type of policy, as there may be some further restrictions in place from the insurer, such as the maximum amount of money your beneficiaries will receive.
There are different types of no-medical-exam life insurance
Just as there are many variations of life insurance available, there are also sub-types of non-medical-exam life insurance that you can choose from. According to The Insurance Bulletin, the three main types are:
- Guaranteed-issue life insurance
This type of policy has no health qualifications. It’s usually suited to someone who is older and looking for a way to ensure that their funeral expenses are covered, for example, when they are no longer around. As the name suggests, approval for a policy is guaranteed if you are within the company’s eligible age range.
You’ll find the downside to guaranteed-issue life insurance is the higher premiums that you could be liable to. In fact, it can be one of the most expensive forms of life insurance. It also commonly comes with graded death benefits. This not only means that the maximum amount that your beneficiaries receive is capped at $25,000, but if your death occurs near the time of purchasing the policy, they will not receive the full amount.
- Simplified-issue life insurance
Another aptly named policy, this type of life insurance involves a simple process that can provide approval quickly. Although acceptance isn’t always guaranteed, there isn’t a limited death benefit, like that of the guaranteed-issue life insurance. Some simplified-issue policies can offer up to $500,000.
- Instant-approval life insurance
Although a medical exam is not required for this life insurance, the company providing this policy will use advanced technology and algorithms to review your medical records. This is known as accelerated underwriting, and can provide a more accurate calculation to determine the premium you pay.
The death benefit also tends to be higher again for these policies, reaching up to $2 million, but approval is not always guaranteed.
Deciding if no-medical-exam life insurance is right for you, is down to your own personal circumstances. If the price and level of coverage meets your needs, without involving a medical exam, then it may be worth considering this type of insurance. As always, do some research about the insurer and policy in question, before making a commitment.
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