While shopping for life insurance, you will come across policies that state, “no medical exam required.” No medical exam? Sounds great! Non-medical coverage is a trend that has been on the rise over the past few years, on both the product and the buyer side.
Carriers are promoting more non-medical life products, and buyers are favorable towards the idea of skipping the doctor’s visit. After all, no one really enjoys going for a checkup. However, while the convenience of a non-medical policy is certainly tempting, we generally advise all of our clients to take a medical exam if possible.
Here’s our reasoning:
Even Non-Medical Policies Involve a Medical Screening
Just because a policy doesn’t require a medical exam doesn’t mean anyone and everyone will be approved. In fact, you might be surprised to learn that non-medical carriers check your medical background, including your pharmacy history, motor vehicle report, Medical Information Bureau (MIB), and your personal responses to a detailed health questionnaire. At the end of the day, someone considered “high risk” may still be declined for a non-medical policy, or limited to outrageously expensive options at best.
Speaking of options, you’ll have exponentially more of them if you take a medical exam.
Non-medical term policies typically have shorter terms and lower face amounts than medical policies. A standard, non-painful checkup unlocks more products, better coverage, and more carriers. For example, you’d have a hard time getting a non-medical policy offering much higher than a $400,000 death benefit. Meanwhile, exceeding a $1 million death benefit is quite common in medical-backed policies.
Not only will you get better coverage with a medical policy; you’ll also get better rates.
Across the board, non-medical policies are noticeably more expensive, especially for older adults. It makes perfect sense: without a medical exam, the provider is unable to quantify the medical risk they are taking by insuring an individual–essentially adding another layer of risk on top of risk.
Therefore, they must err on the side of caution and charge higher premiums.
Higher Chances of Being Approved
If you’re in good health overall, a medical exam works in your favor. It leaves no questions asked, enabling the insurance provider to approve you with greater confidence. Oftentimes, doctors don’t use cold, hard medical terminology when mentioning slightly elevated or unusual lab results to longtime patients, in hopes of curbing any sense of panic. All is well, until you try to apply for a non-medical policy and your background uncovers the high cholesterol you never knew you had. At that point, it might appear to the provider that you were attempting to misrepresent yourself, which will only bring added scrutiny.
Keep in mind that when you’re applying for a non-medical policy, the insurance company isn’t searching for reasons to approve you; they’re searching for reasons not to approve you. Also note that most policies have a two-year contestability clause, meaning that if you die within the contestability period, the insurance company can investigate and void the death benefit to your family if they find that you gave inaccurate medical information.
Free Health Checkup
You can only avoid getting a health checkup for so long–inevitably, at some point, you will have to visit the doctor’s office.
So, why not bite the bullet now and take a medical exam for life insurance? You’ll get all of your lab tests and vitals free of charge, as the exam is billed directly to your insurance company upfront, regardless of your application’s outcome.
Case by Case Consideration
Lastly, when you get a medical exam, underwriting becomes more lenient and personalized. If you had, for instance, a previous cancer diagnosis that is now NED (no evidence of disease), a provider might still approve your application seeing that the cancer has gone into complete remission, whereas they would have declined if you had simply answered, “Yes” to the question, “Have you had cancer in the past?” on your survey.
Finding the Right Policy
Are you shopping for life insurance and wondering where to start? JRC Insurance represents more than 40 top-rated carriers, so you can be sure you’ll find the best rates on the coverage you need. Click here for a free quote.
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