Understanding No Medical Exam Life Insurance

Most life insurance plans will require the policyholder to undergo a medical examination before an insurance company will underwrite the policy. This exam helps the insurance company understand the policyholder’s overall health picture, so they can determine their risks.

The insurance companies then use this risk assessment as a means for approving or denying a life insurance plan for the policyholder, and setting the associated premium. But, there are some companies that offer no medical exam life insurance plans that streamline the approval and underwriting process.

What Are No Medical Exam Life Insurance Policies?

The name of “No Medical Exam Life Insurance” policies explains the basic details of it. These are life insurance plans that don’t require the policyholder to undergo a medical examination prior to obtaining the plan.

In lieu of this medical exam, applicants submit their past medical records to the insurance company. The company then uses these medical records to assess the applicant’s overall health and the premium for their insurance policy if they are approved.

Instead of an in-person medical exam, applicants typically will need to do a telephone interview to answer some basic questions about their overall health and what type of policy they wish to obtain. The insurance company may also require additional testing if something comes up in the medical records they want to learn more about.

Who Qualifies for No Medical Exam Life Insurance Policies?

People who are considered generally healthy will qualify for no medical exam life insurance policies. This includes people younger than 65 without an extensive history of serious medical conditions.

Typically, people who are 65 years or older, and those who suffer from certain medical conditions won’t qualify for a no medical exam policy. However, the final determination is made by the insurance company on a case-by-case basis.

In addition, keep in mind the insurance company may request specific testing or bloodwork, for example, if something in your medical history concerns them. This would still be less invasive than a full medical exam, of course, but it won’t be the perfectly streamlined no medical exam version.

Finally, insurance companies may only offer life insurance plans without a medical exam for policies that are less than $2 million. Plans above that amount may require a full medical exam, no matter how pristine a person’s past medical records are.

Types of No Medical Exam Life Insurance Policies

There are two main types of no medical exam life insurance policies: simplified issue and guaranteed issue.

Simplified Issue Life Insurance

Simplified issue typically doesn’t require a medical exam or blood work. Insurance companies will determine eligibility based on responses to a medical questionnaire. Then, the applicant will submit their medical records for final confirmation.

Simplified issue policies may carry higher premiums since the insurance company is taking on more risk than traditional life insurance policies. But, there are many benefits of this policy, too, with acceptance rates being quite high.

Guaranteed Issue Life Insurance

Guaranteed issue is a type of whole life insurance. It provides coverage for the applicant for their entire life, paying a guaranteed death benefit no matter when the policyholder passes away.

Unlike simplified life, guaranteed issue plans are typically reserved for older people, between the ages of 50 and 80. A main reason for this is the shorter average policy coverage term, since the policy is whole life.

These plans allow policyholders to build cash value in the plan over time so many people will use them as investment vehicles. In exchange for not requiring a medical exam, guaranteed issue plans typically limit the total death benefit amount for the first few years of the policy.

Benefits of No Medical Exam Life Insurance Policies

The main benefit of a no medical exam life insurance policy is that it takes significantly less time from application to approval. Typical life insurance policies will take a few weeks for the underwriting process to complete. The medical exam itself may take some time to schedule, and then results will take some time to come back as well.

Relying only on past medical records will eliminate a good amount of time from the underwriting process by streamlining the logistics. This is a big benefit for anyone who wishes to start their life insurance policy as soon as possible.

It also comes with benefits for the insurance company, which can cut costs by not having to contract as many medical examiners. In a way, it’s a transition to telehealth, which became very popular, and necessary, during the COVID-19 pandemic.

At the same time, these no medical exam life insurance policies often provide similar or even greater coverage than traditional life insurance policies. The costs for premiums are typically comparable than traditional policies, and some can even be cheaper.

Drawbacks of No Medical Exam Life Insurance Policies

There aren’t really many serious drawbacks of no medical exam life insurance policies, per say. One downside is that not everyone is automatically eligible for these policies. As mentioned before, older people, those who have poor medical history and those who are seeking large policies may not qualify.

This isn’t necessarily a downfall of the policy itself, though. It just means that a full medical examination might be required for these people to obtain a life insurance policy.

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