Pros & Cons of Life Insurance Without Medical Exam
Many insurance companies offer a term life insurance policy without having to take a medical exam.
Immediately upon hearing this, most people's thoughts are, "Wow, that sounds great. I'm definitely going with this type of policy!"
But is this really the best route to go?
In this article, we've laid out the pros and cons of purchasing no exam life insurance to help you make an informed choice.
Here’s what we'll cover in this post:
Quick Article Guide
Here’s what we'll cover in this post:
What Is Life Insurance Without a Medical Exam About?
Every life insurance company requires that you take a medical exam before you can be approved for most insurance policies, including both term and permanent policies.
The purpose of the exam is so they assess your health with respect to your life expectancy. By getting a clear picture of the current and future prognosis of your health, they can rate you and set the premium they will charge.
These exams do not cost you anything and they are relatively non-intrusive. However, many people balk at the thought of having to take time off for these exams or might be under the impression the exam will cost them money.
Another problem with traditional policies is that they can take up to several weeks before you the approval process is completed.
As an alternative, many insurers are now offering term life insurance policies which don’t require a medical exam. You simply apply, complete a brief questionnaire, and are either approved or declined.
But, there’s some crucial information you need to take into account before you jump on the band wagon, so let’s look at both the pros and cons of getting life insurance without a medical exam.
Pros of Life Insurance without a Medical Exam
The upsides of getting a life insurance policy without a medical exam are:
1. Faster Approval for a Life Insurance Policy with No Medical Exam
People are impatient today and they like things to happen quickly without having to wait. You can get approved for a policy without a medical exam in as quickly as 24 hours.
Many business people need life insurance when they apply for a business loan such as a Small Business Administration (SBA) loan. Most lenders require that the loan is insured to secure the loan to ensure that it can be re-paid. Even many personal loans may require that you be insured with a life insurance policy before they will approve you.
The problem is that many people simply can’t afford to wait several weeks to get approved for a traditional life insurance policy.
2. No Medical Exam Life Insurance Is Convenient
Life is hectic and many people have busy schedules. If you’re healthy right now and want a policy within 1-2 days, then the simple convenience of applying, completing a brief questionnaire is quite appealing because these policies are very handy and easy to obtain.
3. Serious or Other Health Issues
You might not have had a medical exam in several years and may have developed health issues such as Diabetes, or have high blood pressure, high cholesterol since your last visit to your doctor. You could be engaging in a high risk occupation or hobbies. You may have a serious health issue which can result in a very expensive premium or be declined altogether, so no-exam life insurance might be your best option.
4. No Needles Required
Some people are very squeamish about being poked with a needle, and a no-exam policy lets you avoid having to undergo this uncomfortable dilemma.
So, what’s the downside?
Cons of Life Insurance without a Medical Exam
If it sound too good to be true, then there has to be a catch right? Let’s look at the cons which include:
1. Life Insurance Without a Medical Exam Costs More
You didn’t really think you could simply get a policy without a medical exam that costs the same as one that requires an exam did you?
If you did, unfortunately that's not true.
The whole premise around life insurance is about risk. A medical exam exposes the health risk that the insurance company is going to assume. Buying a policy without a medical exam means the insurance company is assuming much more risk.
Luckily, in the past few years, the cost of no-exam life insurance has become much more competitive with traditional exam policies, but they are still a little bit more expensive per month, so it's something to keep in mind.
2. Shorter Terms and Less Coverage for Life Insurance Without a Medical Exam
Another drawback is that the amount of death benefits you can buy is much more limited, and most insurers won’t offer more than a $500,000 policy. If you need a large policy, you might be out of luck.
Also, the terms they offer are more restrictive depending on your age. Mainly, you cannot get more than a 15-year term if you’re age 60 for a policy without a medical exam for example. With a traditional policy with a medical exam, you can get a 20-year term up to age 69.
Questions? We Can Help!
Not sure if the no-exam route is right for you? That's where we come in!
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 63 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.
Co-Founder and Managing Partner
Jason offers more than a decade of life insurance experience to JRC where he is a co-founder and managing partner. He specializes with helping clients who are considered a “high risk" for life insurance by finding the most affordable options for coverage available to them. Outside of work, Jason enjoys surfing, traveling, and spending time with friends and family.
Expert reviewed by:
Louis Lopes, CLU ChFC
Chartered Life Underwriter, Licensed Life and Health Agent
Louis has been in the insurance business for over 30 years. He specializes in “high risk” cases as well as more complex coverages for long term care, disability, and estate planning.