Originally, no exam life insurance policies were much more expensive than traditional policies. But in the past few years, they have become much more common, therefore decreasing the monthly premiums by quite a bit.
In this article, we’ll discuss what a no exam life insurance policy is, as well as the different types of policies you can get without taking a medical exam.
So if that’s something that interests you, keep on reading!
Quick Article Guide:
- What is No Exam Life Insurance?
- What Are the Different Types of No Exam Policies?
- Term Life Insurance
- Whole Life Insurance
- Guaranteed Universal Life Insurance
- Guaranteed Issue Life Insurance
- Questions? We Can Help!
No trickery here – no exam life insurance is exactly what it sounds like: applying for life insurance without having to take a medical exam.
When applying for a traditional life insurance policy, you typically send in an application with your information, and have a practitioner come to your home or office to complete a free medical exam. The exam normally takes less than 30 minutes, and tests for a variety of things.
If you have any sort of health issue, however, taking the medical exam may increase your rates by a significant amount. That’s why no exam life insurance has become a much more popular option.
Opting for a no exam policy doesn’t mean you’re completely in the clear – the life insurance underwriter will still request your previous medical records, and look through them thoroughly. They also tend to be less lenient with certain health issues or lifestyles, so it’s important to speak with an independent agent to make sure no exam life insurance is right for you.
With the increase in popularity, some life insurance companies offer up to $1,000,000 in coverage with no exam policies, and they have a much faster approval time – some as little as 48 hours! You can typically choose to apply online or over the phone.
The convenience and fast approval time is definitely a big plus, and a big reason why so many more people are choosing the no exam path these days.
If you’re not familiar with life insurance, there are two main categories: term and permanent life insurance. Within permanent life insurance, there are a few subcategories, including whole life insurance, guaranteed universal life insurance, and guaranteed issue life insurance.
For a quick rundown, here’s what each of them entail:
Term Life Insurance: a life insurance policy that is in effect for a certain number of years (the term). Usually the most affordable type of policy.
Whole Life Insurance: a permanent life insurance policy that has a death benefit and investment component. They don’t typically require a medical exam.
Guaranteed Universal Life Insurance: Another form of permanent life insurance that is somewhat of a hybrid between term and whole. Instead of being in effect for a set number of years like term life, it’s guaranteed until a certain age (such as 90, 95, 100, 105, 110, or even 121). With the average lifespan of an American being 79-years-old, you’re pretty much guaranteed permanent coverage. Most companies require a medical exam, but there are a select few who do not (we’ll get into that later).
Guaranteed Issue Life Insurance: This life insurance policy is for those who don’t typically qualify for any other policy due to poor health conditions. It’s available to those between the ages of 50 and 80 or 85, and is also known as a “no questions asked” type of policy – no medical exam is required.
Now that we’ve covered the basics, let’s move on to each type of policy in a little more depth.
Term life insurance is the most common “no exam” option. Like mentioned previously, this type of life insurance is not permanent – you choose a set number of years for the policy to be in effect (such as 10, 15, 20, 25 or 30 years).
Since it is temporary coverage, term life also has the advantage of offering the most coverage for the least amount of money. The amount of coverage you choose for your policy is called the “face amount”, and the amount of time you need coverage for is called the “term.”
If you pass away during your term, your beneficiary/beneficiaries will receive the face amount as a death benefit. Term life policies will cover the insured if any sort of health related issue were to occur.
Another perk of term life insurance is that your rates are guaranteed during your term, regardless of any changes to your health or lifestyle. This means that whatever premium you pay in the beginning will be the same premium you pay 10, 15, 20 years later.
What’s the main reason people buy a no exam term life policy?
Typically these policies are bought to protect a life event – whether that be to secure an income until the insured reaches retirement age, or to secure a mortgage. Term life policies can also be purchased for business purposes, such as securing an SBA loan or funding a buy-sell agreement.
This type of permanent life insurance coverage is one of the most commonly purchased policies in the United States.
Like we stated earlier, this type of policy includes an investment component. This means that when you pay your premiums, part of what you pay will go towards your cash value accumulation, which theoretically builds over time. Unfortunately, what they don’t tell you is that this accumulation is extremely minimal, even if you’ve had your policy enacted for years.
A common misconception about whole life is that it is in force for the entire duration of your life. You’d think because it’s a form of permanent coverage it would, but that’s the not the case. Many whole life policies (including the “Level Benefit” policy offered by AARP) actually cancel your coverage at 80-years-old, and buying life insurance after that age is extremely difficult.
Another important thing to note is that some whole life policies do not have fixed premiums, meaning your premiums will increase every 5 years or so. This isn’t the case with all of them, but it’s important to check if your policy includes guaranteed premiums when purchasing. In addition, the largest face amount you can get with whole life is typically $50,000.
If you have a lot of health issues or a dangerous lifestyle that would prevent you from doing well on the medical exam, whole life may be a good option. However, because they don’t require a medical exam, whole life policies are also the most expensive type of life insurance, so it’s important to keep that in mind when deciding which type of policy to go for.
If you’re looking for permanent life insurance coverage with guaranteed premiums and without an investment component, guaranteed universal life (GUL) insurance is a great option. This type of policy is cheaper than whole life (but more expensive than term), and is also much easier to understand than whole life insurance.
Like we mentioned earlier, most companies offering this do require a medical exam to receive coverage, but depending on the applicant’s age and health, there a few who do not. This includes companies such as:
- American National
- John Hancock
- Lincoln Financial
- Penn Mutual
- Principal Financial
- United of Omaha
With GUL, you have the ability to adjust your policy to the age of your choice (typically to ages 90, 95, 100, 105, 110, or 121), while also being able to choose a face amount up to $1,000,000. In short: it’s less expensive than whole life, and offers much higher coverage.
Why do people normally purchase a GUL policy?
A GUL policy provides: a guaranteed tax-free death benefit for beneficiaries, a vehicle to pass along wealth to the insured’s children/grandchildren, a way to cover estate taxes, fees and medical bills, the option to use the death benefit to set up a charitable trust, and a good security net for a Buy/Sell agreement.
If you’re between the ages of 50 and 80 (or 85, depending on the life insurance company) and have exhausted all your options and/or been declined by every company you’ve applied with, this type of life insurance policy might be for you.
Also known as “GI” life insurance, this type of policy is referred to as a “no questions asked” type of life insurance policy, and you can receive coverage in just a few days. It offers anywhere from $5,000 to $25,000 in coverage, and your rates are guaranteed until age 100. Here are some reasons why you might opt for a GI policy:
- You’re permanently disabled
- You have serious health issues
- You have a mental disorder that you are currently collecting Social Security/SSDI for
- You’ve recently been diagnosed with:
- Congestive heart failure
- You have an implanted heart defibrillator
- You’re on kidney dialysis
Most GI policies have at least a 2-year waiting period before the beneficiary/beneficiaries can receive the full death benefit, and will only receive it if the insured’s death was due to a medical condition.
At JRC Insurance Group, we have helped thousands of families and businesses with their life insurance needs, and we can help you too! Our agency is licensed in all 50 states and we’re independently owned and operated.
As a non-partial, no-fee brokerage, our goal is match our clients with the best life insurance options available by shopping and comparing rates from more than 45 highly-rated insurers. By having access to dozens of companies and their guidelines, we’re able to save our client’s time and money.
Most importantly, our services as completely free, and there is no cost to apply for coverage. Give us a call toll-free today at 855-247-9555, or you can request a free quote online to compare rates and options from dozens of insurance companies in less than a minute.