Life Insurance without a Medical Exam

Don’t like Needles or Medical Exams?  Consider Life Insurance with No Medical Exam

Generally when someone thinks of purchasing life insurance, they also think of the necessity (some may say “hassle”) of having to do a insurance company medical exam where the carrier requests blood and urine samples.  For those who don’t like either (or both) of these requirements,  there is an alternative. Often you can buy life insurance without having to do any medical exam…this is typically referred to as “no medical” or “non-medical” exam life insurance.

Many life insurance companies now offer no medical exam life insurance policies, typically up to $300k in coverage, with some offering up to $500k or more. Some policies can even be obtained the same day you apply. Processing times with these policies are reduced to 1-14 days, rather than 3-6 weeks, which is generally how long a fully underwritten (the process the carrier goes through to assess your eligibility and risk class which includes requesting a medical exam or what is referred to as a “paramed exam”) policy will take before an offer is made to you by the company.

More and more products with no medical examination are entering the market every year, which is helping reduce premiums.

Six important topics to address:

1. Types of no medical exam life insurance (Whole vs Term Life)
2. Pros and Cons of no medical exam life insurance
3. What the insurance companies DO look for with no medical exam life insurance
4. When it makes financial sense to consider no medical exam life insurance
5. Things to look for in your policy
6. A few of the best companies that offer no medical exam life insurance

1) Types of no medical exam life insurance

-The most commonly used no medical exam life insurance products are issued as term policies, usually for 10, 15, 20, 25, or 30 years terms. Different companies will vary on coverage amounts and durations that they allow.

-Whole life insurance policies without medical exam are available, however, these are usually for very small amounts, and are also known as “Final Expense” policies. These policies will usually range from $5000 to $50,000 of death benefit (face amounts).  Final expense policies will be addressed in a future article.

2) Pros and Cons of no medical exam life insurance

Pros:

Convenience:

-obtain life insurance coverage FAST. Most applicants are covered in 1-14 days, possibly even the same day as applying!

-easy and convenient application process

-no hassle of seeing your doctor or having someone come to your home to give you a medical exam.

Peace of mind:

-perhaps you haven’t been to the doctor in a few years or are generally worried about your health and potential negative lab results.  If you are approved for no medical life insurance first you can always later apply for fully underwritten life insurance knowing you have coverage already in place!

Cons:

Limit on amount of coverage that can be obtained

-most companies will only allow you to purchase up to $250-$300K max of coverage, although companies do vary.

More expensive

-sometimes these policies can be very competitive with regular policy premiums, but generally, your premium costs will be anywhere from 10-50% more expensive over the life of the policy than fully underwritten policies.  This increase in premium is because the life insurance companies have less medical information to evaluate you on, so they are assuming more risk when insuring you.

3) What the insurance companies DO look for with no medical exam life insurance

Just like “normal” life insurance with a medical exam, insurance companies that offer no medical exam life insurance still follow some specific underwriting guidelines. In some cases an underwriter from the insurance company will call you and conduct about a 15-20 minute phone interview. They will generally qualify you based on a list of questions on your application, along with the results they receive from the following 3 databases.

MIB (Medical Information Bureau) industry wide database that just about every life insurance company used and will share and access health information about individuals gathered from prior applications for insurance and/or other underwriting investigations.

MVR (Motor Vehicle Report) – checked for history of DUIs, suspended licenses, reckless driving and excess moving citations.

RX (Pharmacy Report) – Database that compiles your history of medications being prescribed.

These 3 bureaus typically would be accessed to help underwrite any other form of life insurance as well, so this is not a process that is considered “out of the norm” for life insurance companies to follow.

4) When it makes financial sense to consider no medical exam life insurance

If you are in good health, as a general rule it makes sense to take the medical exam and save yourself typically between 10-50% in lifetime premium costs. With that being said, there are instances where it makes sense to secure no exam life insurance coverage. Here are a few hypothetical scenarios:

Scenario 1)

You are in good health, but have not had a medical check up in the last 2-5 years. There is a chance your next lab results might severely hurt or even worse, entirely eliminate, your options for receiving life insurance coverage. In this scenario, it might make sense to first obtain your no medical exam coverage (possibly for a smaller amount), and then complete your medical exam after your coverage is affect. Then, if it makes sense, you may decide to replace and/or increase your coverage amount with another “normal” or “fully underwritten” exam policy.

Scenario 2)

You need coverage now! Many of the carriers that offer no medical life insurance will process your application and have you covered within 2 weeks.  A few in even less time.  A traditional policy will typically take around 4-6 weeks to complete and receive coverage.  When might you need coverage quickly?  A few examples:

-Divorce Decrees
-SBA loan process (collateralized loan)

5) Things to look for in your policy

some “no medical” policies will only provide “accidental death” coverage which is where the company only pays a death benefit when you die as the result of a complete accident. Avoid companies that offer only this version of a no medical exam policy. You want to have a policy that pays a death benefit the same way any other fully underwritten life insurance policy would… whether that be by accident or any other cause.   Getting the right kind of no medical life insurance is important and we recommend utilizing an independent agent when shopping for no medical exam life insurance.

companies will view your risk differently. Underwriters from different companies will have differing health criteria/standards in their risk assessment of you. This is another reason it is recommended to use an independent insurance agency that can shop ALL of the best carriers available in order to find the most competitive offer.

6) A few top companies that offer no medical exam life insurance

Transamerica:

Transamerica Life Insurance and Long-Term Care Insurance

Face Amounts:  $25,000 – $99,999 (their flagship Trendsetter® Super Series term) and $25,000 – $249,999 (their “Living Benefits” term series*)

*Transamerica’s Trendsetter® LB (aka Living Benefits) series of term life policies provide an extra level of protection by offering living benefits as well as death benefits.  Policyholders can access cash by accelerating death benefits to help cover medical costs, home care/nursing home care, or for any reason they chose, where there is a qualifying chronic, critical illness or terminal illness.  The total benefit received is the lesser of 90% (100% for a terminal illness) of the policy face amount or $500,000.  Conditions apply and may not be available in all states.

Issue Ages: 18-60

Term lengths: 10, 15, 20, 25, and 30 years

Tobacco Users can qualify

Average Approval Time: 2-4 weeks

Medical Records Needed:  Underwriters reserve right to request medical records.

American National (ANICO):

American National

Face Amounts:  $50,000 – $250,000

Issue Ages: 18-65

Term lengths: 10, 15, 20, and 30 years

Average Approval Time: 2-3 days

Medical Records Needed: Underwriters reserve right to request medical records.

Sagicor:

Sagicor Life Insurance

Face Amounts:  Up to $400,000

Underwriting decisions in as little as 15 minutes and can be issued same day!

Issue Ages: 18-65*
*20 Year Term Male & Female Tobacco limited to age 55

Medical Records Needed:  No records are required.  If paper application, there is a brief Telephone Underwriting Interview

Fidelity Life:

Fidelity Life

Face Amounts:  Up to $300,000

Issue Ages: 18-65

Medical Records Needed:  None

Mutual of Omaha:

Mutual of Omaha Life Insurance and Long-Term Care Insurance

Face Amounts:  $50,000 – $400,000

Average Approval Time: 1-2 weeks

Medical Records Needed:  Underwriters reserve right to request medical records.

Life insurance without a medical exam is not for everyone, but there are times where it is appropriate. Whether you are considering no medical exam life insurance, or traditional (“fully underwritten”) life insurance, we encourage you to contact an independent agent to help guide you through these decisions and to help obtain the best coverage for you.

 

Note: Coomes Insurance & Financial Services, LLC and its representatives do not provide legal or tax advice.  Only a qualified attorney or CPA can provide legal or tax advice and we recommend that everyone should consult with their advisory team as to any tax consequences of making a life insurance purchase.

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