Life insurance is something we all need, even though we don't all have some. Many of us don't want to take an exam and consequently put off getting coverage. There are several different types of insurance policies you can purchase without a medical exam.1. Different Types of No Exam Life Insurance Available
- Term Life Insurance- You can purchase up to $500,000 of coverage without an exam. The amount of insurance and term available will vary based on age. Also, most carriers only allow up to $200,000 or $250,000 of coverage. You will pay a bit more for the priviledge of not taking the exam. There are a number of medical questions you must answer to qualify for the coverage. Most policies have the same riders and benefits as fully underwritten term insurance. You will also have the ability to convert these policies to permanent coverage. The process is quick and painless and often coverage is in force in a very short period. (Not all companies offer term life without a medical exam.)
- Simplified Issue Whole Life Insurance is often called final expense insurance or burial insurance.You can purchase up to $40,000 of coverage. If you want more insurance, you can buy policies from more than one carrier. Coverage is available up to age 89. There are many carriers that offer simplified underwriting where you must be able to answer no to a number of health questions to qualify. Each company asks the questions in a different manner, meaning you may get approved by one company, and declined by another. These policies last your lifetime with the face amount and premium remaining level. They policies can be put in force very quickly, sometimes within a day or two.
- Simplified Issue Graded Whole Life Insurance is another form of final expense coverage. If certain questions on the application are answered yes, you may only qualify for a graded policy. Graded policies do not offer full coverage on day one. You are covered for accidental death on day one. For death from medical reasons, the coverage goes into effect after a waiting period of two or three years (perhaps with a percentage phased in each year). Usually, if you pass from medical reasons during the graded period, your beneficiary will receive all premiums paid plus up to 10% interest. You can purchase this coverage up to age 80. The maximum coverage allowed is usually $20,000. These policies are put in force very quickly.
- Guaranteed Issue Life Insurance- You can purchase up to $25,000 of coverage. Coverage is available up to age 85. There are no underwriting requirements for this type of policy. Every applicant is accepted. Many companies with these policies will refund premiums plus interest for the first two years and then pay out the death benefit after that time period. One company has a three year period where year one premiums are returned without interest, year two you receive 50% of the face amount, year three you receive 75% of the face amount and year four your beneficiay receives the full face amount. These policies should be purchased only if you cannot qualify for any other type of permanent coverage. These policies are put in force very quickly.
2. Which one should I Choose?
There are a number of factors that influence what policy you should buy.They are:
- What are your goals?
- How much coverage do you want?
- Are you looking for term or permanent coverage? (Relates closely to your goals)
- How old are you?
- What if any are your health issues?
If you are looking for final expense coverage you will want permanent coverage. That means you would look at the whole life type of policy if you can qualify. If you want more than $40,000 of coverage, you can purchase policies from more than one company to get as much coverage as you want. (There are other options available, but they will require an exam.)
Are you young and looking to protect a family with children? Maybe you want term...more "bang for your buck"; that is, more coverage for your premium dollars.
You would only choose guaranteed issue if you can't qualify for either of the other coverages. However, if you can't qualify for a no exam policy, you still may be able to qualify for a policy with an exam. It's just another option if you can't get your first choice.
3. How Can I Get a Quote?
You may have noticed that it's difficult to find quotes on line. You can usually find the term quotes, but there aren't on line quote engines for permanent coverage.
We suggest you speak with an independent life insurance agent. Keep in mind that although these products have simplified underwriting and only ask limited medical questions, you may not qualify for all carriers. That's because each carrier has slightly different guidelines and asks somewhat different questions.
An independent life insurance agent has many different companies to choose from. They know the companies and have access to the underwriting guidelines. This will be helpful in getting you the best value.
Use your independent agent to your advantage and they will find you the best price that you can actually qualify for and purchase. No need to waste time getting declined and probably getting discouraged. (For more information on this click here.)
The Bottom Line
There are several types of no exam life insurance policies. Which is the best one for you will depend on your situation. An agent can help make your search easier. Buying life insurance is not like buying a car, so talk to your independent life insurance agent. You will be one big step closer to protecting your family and that's what life insurance is all about.