The 4 Types of No Exam Life Insurance

Have you been pushing off getting life insurance because you want to avoid the dreaded medical exam? Or you don’t have the patience for an application process that takes weeks or even months? If this sounds like you, no exam life insurance may be just what you’re looking for. 

No exam life insurance is a type of insurance that allows you to get coverage without having to undergo a medical exam as part of the application process. While it may sound too good to be true, bear in mind that the various types of no exam policies do have some drawbacks. But nothing is perfect. The question is whether the benefits outweigh the drawbacks. Here, we’ll provide you with the basic facts so you can make that call. 

Of course, one of the main questions that everybody asks about no exam life insurance is, how much does it cost? It’s easy to get a free quote, but before you do, it’s a good idea to acquaint yourself with the different policies and what they have to offer. 

Types of No Exam Life Insurance

To understand whether no exam life insurance is the right move for you, it’s important to first know what’s out there. There are 4 main types of no exam life insurance:

• Accelerated underwriting
• Simplified life 
• No-med 
• Guaranteed issue

Accelerated Underwriting

Accelerated underwriting isn’t an actual policy but a process. Many insurers today offer an accelerated underwriting process because people simply don’t want to wait so long for their results. With accelerated underwriting, you apply for a traditional policy, and if you fit the criteria, you can skip the medical exam and have your application fast-tracked. You’ll be told if you fit the criteria immediately upon applying.

How can life insurers respond so quickly? When you apply, they gather electronic information about you from third-party sources like the MIB, DMV, and your pharmacy. They then plug your information into a set of algorithms and determine immediately whether you qualify to skip the medical exam. Bear in mind that only people in very good health will qualify — others will be told that they must undergo a medical exam in order to get coverage. If you’re someone who doesn’t qualify, you have the choice of completing the medical exam or opting for a different type of no exam policy (see below).

The main benefits of accelerated underwriting are that the process is fast, and the monthly premiums you’re given are very competitive. In other words, you can get low premiums without having to undergo a medical exam. 

Simplified Issue

Simplified issue is a type of no exam life insurance that is sold as both term and whole. The application process is much faster than that of a traditional life insurance policy since very few health questions are asked. However, because some questions are asked, these policies are partially underwritten, so you won’t get a response immediately. It usually takes a few days to get an answer, but that’s still a good deal less than the two months a traditional policy takes.

Simplified issue policies offer coverage up to $500,000 or $1 million but do come at a slightly higher cost because of the limited underwriting.  

No-Medical

No-med life insurance policies allow you to apply for life insurance without the need for an exam, but in this case, the insurer will still ask for a copy of your medical records. This step increases the processing time of the application, but it also means that you’ll get slightly lower rates than the simplified issue. The general rule of thumb is that the more an insurer knows about you, the lower your rates will be (unless you have very serious health issues).

Guaranteed Issue

Guaranteed issue is a type of insurance that anyone can be approved for (as long as you’re under the age limit of 80). No health questions are asked on the application and approval is immediate. As you can imagine, the premiums for these policies are very high since the insurer knows nothing about you. Additionally, coverage is usually capped at $25,000. These policies are often used to cover funeral costs, which average out at $10,000. 

Buying life insurance is an extremely personal decision, but there are several rules of thumb that may help guide you. When it comes to no exam life insurance, accelerated underwriting is always your best option, since it offers the best rates. If you can’t qualify for it due to health issues, you’re likely to get more competitive rates from no-med policies. Guaranteed issue is considered a last resort and should only be considered if you can’t qualify for any other kind of life insurance.

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