Life insurance provides peace of mind for individuals and family members in knowing that financial burdens will be lessened upon one’s passing. Sometimes, purchasing life insurance can be a long process due to the need to take a medical exam and wait for the underwriters to approve your policy and assign a premium. It’s also the case that some get turned down for life insurance due to health-related risk factors that the insurer deems too risky.
If you’re in need of a policy quickly or are concerned that you might be turned down due to the results of a medical exam, then a no-exam policy might be an option for you. As the name implies, a no-exam policy offers the possibility of approval for life insurance without taking a medical exam.
How Do No-Exam Life Insurance Policies Work?
A no-exam life insurance policy implies that you have the opportunity to achieve approval for a policy without the need for a lengthy medical exam. They can be an ideal option for those who might not otherwise qualify for life insurance or need to secure a plan within a specific period of time.
Some of the downfalls of a no-exam policy include that the coverage amount is often lower than policies that are medically underwritten. Also, premiums are sometimes higher for these types of policies, and they can have longer waiting periods before the policy takes effect.
What Types of No-Exam Life Insurance Policies Are Available?
There are different types of term and whole life insurance policies that don’t require a medical exam. However, some policies still require you to answer a brief health questionnaire before approval is granted. A term life policy, as the name implies, is valid for the term of the policy, whereas a whole life policy is valid for the remainder of the insured’s life. A whole life policy also offers the possibility for financial gains and the ability to withdraw a loan from the cash value accrued.
The two main types of life insurance policies that don’t require a medical exam are simplified issue and guaranteed issue policies.
Simplified issue policies request you to complete a health-related questionnaire to assess your risk profile. In some instances, you might also be required to provide a copy of your medical records. Based on a report by the Society of Actuaries, there is typically no risk classification beyond gender, smoker status, and age and the acceptance rate for applicants is between 70% and 90%.
Guaranteed issue policies are those that generally guarantee coverage without the need for a medical exam or health-related questionnaire. These policies are most commonly whole life policies.
What Companies Offer No-Exam Policies?
There are several companies that offer no-exam life insurance coverage. U.S. News and World Report compared dozens of such insurers and ranked them based on financial strength, policy offerings, and customer service. The following are eight of the highest ranked on their list.
Rating: 4.4 out of 5.0
Coverage Limits: Range between $25,000 and $500,000 and last 5 to 20 years
Age Limits: Haven Simple = 20 to 55, Haven Term = 64 and younger
Benefits: High coverage amounts, online quote and application process
Disadvantages: Not available nationwide, few riders available
Rating: 4.3 out of 5.0
Coverage Limits: Range between $50,000 and $1.5M and last 10 to 300 years
Age Limits: 60 years or younger
Benefits: No medical exams, online quotes and application
Disadvantages: Not available for New York residents, no riders available
Rating: 3.9 out of 5.0
Coverage Limits: Range between $5,000 and $25,000 for whole life
Age Limits: Between 50 and 80
Benefits: Guaranteed coverage for certain age groups, several riders available
Disadvantages: Only one no-exam policy option is available, low coverage amounts
Rating: 3.9 out of 5.0
Coverage Limits: Up to $50,000 for up to 10 years with an option to convert to a permanent policy
Age Limits: Can be covered until age 50 or up to 10 years, whichever is first
Benefits: Multi-line discounts are available, can get a policy the same day
Disadvantages: Limited term lengths, low coverage amounts
Rating: 3.8 out of 5.0
Coverage Limits: Up to $50,000 for whole life
Age Limits: Depends on the policy chosen
Benefits: Whole life no-exam policy, no annual policy fee
Disadvantages: Limited eligibility, no available riders, must have a Nationwide homeowners or care insurance policy to qualify
In addition to the insurers above, Mutual of Omaha, Prudential, and Transamerica also offer no exam insurance policies and rank numbers 6 to 8 on the list, respectively.
Which Policy without a Medical Exam Is Best for You?
To determine the best options for your needs, ask yourself the following questions:
- What coverage or death benefit level do I need?
- Do I want to be able to use the policy as a financial tool (term vs. whole life)?
- What is my budget?
- How long do I need the policy to be in effect?
Once you have the answers to these questions, prioritize them. Then, shop around to find a policy that gets as close as possible to your needs. Finally, it’s best to shop around and receive a handful of quotes to ensure you receive the best price based on the policy terms.