Buying life insurance can be a hassle, but no exam life insurance makes it easy. The way it does this is by allowing you to bypass lengthy health questionnaires and the actual medical exam. When you provide minimal health information to insurers, the underwriting process is quite short, or non-existent in some cases, which speeds up approval and gets you coverage in just a few days.
The thing about no exam life insurance is that not all policies are the same. Much like traditional policies, there are many types of no exam policies that offer different amounts of coverage and require different amounts of information.
In this article, we’ll discuss 5 different types of no exam life insurance:
- Guaranteed Issue
- Simplified Issue
- Accelerated Underwriting
- Instant, online term life
- Group life insurance at work
Choosing the No Exam Policy That’s Right For You
With so many no exam options, it can be hard to decide which one is right for you. Below we’ve included details about the 5 different types of no exam life insurance so that you can make an informed decision. If you need further assistance, you can contact the insurance advisors at Sproutt. Sproutt is not affiliated with any insurance carrier, so the advice you get is fair and unbiased.
Here are the 5 types of no exam life insurance.
Guaranteed Issue Life Insurance
Summary: Guaranteed Issue doesn’t require you to provide any health information, and acceptance is guaranteed.
What you should know: With Guaranteed Issue life insurance, insurers know very, very little about you. Therefore, the maximum coverage only goes up to $25,000 or $50,000. On top of that, you pay a lot for guaranteed acceptance. These policies are typically best for people over the age of 50 and up to 85 who think they will be turned down by a policy that does require a medical exam.
Guaranteed Issue policies often come with a graded death benefit, which means that if the policyholder dies within 2 or 3 years (depends on the company) of policy purchase, the beneficiaries only get a portion of the death benefit. This is another way insurers protect themselves from taking on too much risk.
Simplified Issue Life Insurance
Summary: Simplified Issue applications include a few questions about your health but there is no exam. Acceptance is not guaranteed and applicants can be denied based on health issues.
What to Know: Questions on Simplified Issue applications usually include:
- Do you smoke?
- Are you currently hospitalized?
- Do you live in a nursing home or receive healthcare at home?
- Do you have AIDS or HIV?
- Have you ever been diagnosed with Alzheimer’s or dementia, cirrhosis, emphysema, or chronic obstructive pulmonary disease (COPD)?
- In the past 24 months have you been diagnosed with cancer, experienced a heart attack or stroke, or engaged in alcohol or drug abuse?
Simplified Issue policies tend to cost less than Guaranteed Issue since the insurer has more details about you and is better able to assess the risk. Coverage usually goes up to $500,000 or $1 million.
Accelerated Underwriting Life Insurance
Summary: Accelerated Underwriting policies are traditional life insurance policies that sometimes allow you to skip the medical exam and get a policy faster. These policies are usually less expensive than Simplified Issue because they collect your personal information from third-party sources, like pharmacy, driving, medical, and credit records.
What to know: Not everyone qualifies for Accelerated Underwriting policies, especially people in poor health. If the insurer can’t find sufficient information about you from third-party sources, it can ask you to undergo a medical exam. This defeats the whole purpose of seeking life insurance without an exam.
Instant, Online Term Life Insurance
Summary: Some companies offer policies that grant instant approval online. In fact, approval can be granted in as little as 20 minutes, especially if you’re under the age of 60 and in good health.
What to know: These policies also collect personal and medical information, but they are fully underwritten using an algorithm to determine monthly premiums. Coverage can go up to $8 million.
Group Life Insurance Through Work
Summary: Many employers offer group life insurance, which doesn’t require a medical exam, grants instant approval, and comes with inexpensive premiums.
What to know: Coverage through group life insurance is usually minimal. In some cases, it equals one year of salary. Due to the limited coverage, it’s often considered supplemental life insurance and can be coupled with another policy. Another downside of this type of policy is that it may be canceled when you leave your job.
Making the Choice
Life insurance is a serious issue, so when deciding which type to get, take your time and do your due diligence. While a policy can always be canceled or renewed, it’s better to get it right the first time around. This is because the general rule is, the younger you are, the lower your rates. This is true for traditional policies and no exam ones. Once you determine how much coverage you need and how much you can afford to pay in monthly premiums, you can decide which no exam policy is best for you.