No exam life insurance is a type of life insurance that allows you to skip one of the most common steps of the traditional application process: the medical exam. Some no exam policies include several basic questions about your health and require medical records from your doctor, while others ask no health questions at all.
Why Is a Medical Exam Usually Required for Life Insurance?
Traditional life insurance policies require applicants to undergo a medical exam before they can be approved. The exam is fairly similar to an annual physical. It involves a medical professional recording your height, weight, blood pressure, pulse, and taking blood and urine samples.
All of this information is sent to the underwriters at the insurance company, who compare it against statistical information gathered from millions of people and assess how big of a risk you pose to the insurance company. If underwriters determine that you pose a low risk, you get low monthly rates. If you are high risk, your rates will be higher. If you pose an extremely high risk, you may be turned down for a policy altogether.
No exam life insurance, on the other hand, requires no medical exam and involves little-to-no underwriting. The idea of bypassing the medical exam is appealing to many people for several reasons. No exam insurance means:
- No invasive blood tests and no needles
- Much quicker approval time
- Easier approval for most
- You don’t have to disclose personal medical information
Types of No Exam Policies
There are three main types of no exam policies:
- Simplified Issue
- Guaranteed Issue
While all of these types don’t require a medical exam, they vary in the amount of health information they do require. Most insurance carriers will ask for non-health-related information, such as driving records, criminal records, and credit checks. You can read more to find out what information you need to provide for no exam policies.
A Simplified Issue policy is a type of term no exam life insurance, and it allows you to skip the medical exam but still includes questions about your current health, medical history, family history, finances, and lifestyle (i.e. dangerous hobbies, driving violations, etc.). Coverage usually goes up to $500,000 or $1 million at the most.
A Guaranteed Issue policy is a type of whole no exam life insurance. It waives the medical exam and doesn’t ask any health questions. As long as you meet the requirements (age, no current serious medical issues like cancer or HIV) and pay the monthly premiums, you can get coverage. Guaranteed Issue policies only offer coverage up to $25,000 or $50,000.
A group policy is a life insurance policy that you get through your employer, and it’s similar to Guaranteed Issue. The application process doesn’t require a medical exam or ask any health questions, since approval is based on a group rate. Coverage usually corresponds to your annual salary and ends when you leave your job.
Pros and Cons of No Exam Life Insurance
There are both pros and cons of no exam life insurance policies, just as there are pros and cons of traditional policies.
- People who have been turned down for traditional policies can usually get coverage through a no exam policy
- No need to take time from your day to go to the doctor
- No invasive blood or urine tests
- Faster approval times
- Transparent pricing
- Usually more expensive than traditional policies (Get a free quote here)
- Smaller selection of policies
- Offers lower coverage
- May have a graded death benefit, which only pays out the full coverage amount two years after policy purchase
Why is Approval Granted Faster for No Exam Policies?
No exam policies offer faster approval times because there is very little information for underwriters to review. Once they review the information they can determine your class (i.e., how much of a risk you pose and how much you will need to pay in monthly premiums). Common classes, in order of low to high premiums, are Preferred Plus, Preferred, Standard Plus, and Standard.
Additionally, people are able to get approved more quickly for no exam policies because they don’t have to wait for a doctor’s appointment.
Are No Exam Policies Only For People with Health Problems?
Anyone can apply for no exam life insurance, though it tends to be more popular among those who have serious medical issues since they will have a hard time getting approved for a traditional policy. However, people who are in good health also choose no exam life insurance because of its convenience and fast approval time. People who need a business loan quickly or are going through a divorce can get no exam life insurance within days, not weeks or months.
How to Apply for No Exam Life Insurance
One of the reasons people choose no exam life insurance is because the application process is extremely easy. Whereas traditional policies require answering lengthy questionnaires, no exam policies require minimal information. Some Simplified Issue policies may require a phone interview, but that’s as far as it goes. And since there is no medical exam, approval doesn’t hinge on a doctor’s appointment, which can take weeks to schedule.
The exact amount of time it takes to be approved depends on the level of background checks the company does. However, there is no question that approval for a no exam policy takes much quicker than a traditional policy.