By Joe Dyton, WCI Contributor
Any type of insurance—whether it’s for your car, home, or some sort of valuable item—comes with a risk, and an insurance company is going to charge you accordingly. The riskier it is to insure you, the higher your premium might be. That’s why car insurance companies want to know about your driving history before they write your policy, and it's why life insurance companies want to give you a medical exam.
Getting life insurance isn’t much different than getting car insurance. But rather than checking for how many speeding tickets you’ve accumulated or at-fault car accidents you've been involved with, life insurance companies want to know how healthy you are before they’ll cover you. You usually will have to provide some medical history information and go through a physical examination.
Or do you?
As it turns out, it is possible to get life insurance without a medical exam. Your policy might be more expensive than it would have been if you had gotten that exam, but it’s not necessarily a dealbreaker. Let’s take a closer look at the risks, costs, and processes that comes from getting life insurance with no medical exam.
How Can You Get Life Insurance Without an Exam?
A medical exam could be why some people shy away from getting life insurance, especially if they have a serious medical condition. This is a mistake for two reasons. One, life insurance is important because it can provide financial cover for your family in the event of your death. Secondly, there are two options for getting life insurance that don’t require a medical exam, which could make a preexisting medical condition a non-issue for getting coverage.
Simplified issue life insurance and guaranteed issue life insurance are the two types of no exam life insurance policies you should look into if you want to skip the examination.
Simplified Issue Life Insurance
With simplified issue life insurance, you just have to fill out a detailed questionnaire about your health, medical history, and family medical history. Insurers will also want to see your prior medical records. Your responses and information replace the medical examination.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is available to those who don’t qualify for traditional life insurance because of a preexisting condition or potentially unaffordable premiums. Like with simplified issue life insurance, you’ll have to answer questions about your medical history and overall health, but an exam is not required.
The downside is guaranteed issue life insurance policies typically have higher premiums in relation to the death benefit—which is capped at $25,000 or less. according to Fidelity Life. That means the maximum you could receive from a guaranteed life insurance policy is $25,000—far, far less than what most white coat investors would need. A lot of the policies come with graded benefits. So, if you were to die within the first couple of years after you buy your life insurance policy, your beneficiaries may only receive a sum that’s equal to just premiums, plus interest. This kind of life insurance is for people who already have serious health issues.
What’s Involved in a Life Insurance Medical Exam?
A life insurance medical exam doesn’t differ too much from a standard annual physical exam. Your height and weight will be measured, along with your body mass index (BMI), and you’ll have to provide blood and urine samples. If you’re over the age of 50 or applying for more coverage, you might have to take additional tests, such as an EKG.
Going through a medical exam might be worth the time if you’re in good health. The combination of a good medical history with an actual physical exam could secure you a lower life insurance premium. Foregoing the exam might work best if you have ongoing health issues that would drive up your rates.
How Much Will My Life Insurance Cost If I Skip the Medical Exam?
No medical exam life insurance policy costs will depend on a few factors. The first is the type of policy you buy. If you purchase a term life insurance policy (insurance that guarantees a death benefit payment if the policyholder dies during a specified term), you’ll likely pay the same as a traditional, medical exam-included policy. Whole life insurance (permanent insurance that covers the policyholder for their entire life) policies without a medical exam are typically a lot more expensive.
The underwriting process is another factor that can determine no medical exam life insurance costs. There’s a chance that skipping the exam could save you money. What if you go through the exam, and a health condition you were unaware of is revealed? That could increase your premium. The same goes if your blood pressure is elevated during the exam because you’re anxious about it.
And, of course, your age, medical health history, and the company you select will determine how much you’ll pay for no medical exam life insurance.
Pros and Cons of No Medical Exam Life Insurance
The benefits and disadvantages of skipping a medical exam when buying life insurance will vary depending on an individual’s financial and health situations. But here are a few pros and cons to consider when determining if you should forgo a life insurance medical exam:
So, Should I Get a Life Insurance Medical Exam?
This decision depends on what you want out of your life insurance policy—as well as your health. If you feel like you’re in good health and want to be eligible for the most amount of coverage possible, you should consider getting a policy that requires a medical exam. Doing so and getting good results could lower your life insurance premium. On the other hand, if you’re concerned that your current health standing or prior medical history will get you denied for life insurance or lead to higher premiums, take a look at your no medical life insurance options, like simplified or guaranteed issue life insurance. Your agent can help guide you as to whether your particular medical condition is going to cause you an issue.
Mortgage Life Insurance
There is one more option, although it is less than ideal. Your bank may offer you mortgage life insurance, i.e. a policy that will pay off your mortgage if you die. These do not generally require a medical history or exam. It has a number of downsides. It is usually not as a cheap as a good term life policy for a healthy person. The amount is also limited to the size of your mortgage. To make matters worse, as you pay your mortgage down, that policy becomes worth less and less. But if you need some coverage and cannot get enough to meet your needs with a guaranteed issue policy, you might consider asking your lender about mortgage life insurance.
Have more questions about life insurance and what kind of policies would be the best for you? Hire a WCI-vetted professional to help you sort it out.
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