How No-Exam Life Insurance Works

A little secret: you do not need a medical examination to obtain life insurance. Some life insurance providers have access, without having to poked and punched, to information and data from third-party sources that can determine what you should cover and at what cost. There is also a kind of policy which does not have any concerns.

However, you should consider how these plans operate before you decide to try to miss the life insurance medical test when applying for cover. They can provide a quick and easy way to get life insurance, but still offer compensation.

Why Insurers Typically Require a Medical Exam

The underwriting procedure used by life insurance firms collects details on applicants and works out an average price. Data information, including personal background, medical information, family medical history, and history of recent and present illness, is required as part of the application process.

As an insurer, you usually get your medical reports from your physicians, and get information about your past prescriptions, your driving record, and previous life insurance claims from outside providers.

Medical examinations began to be part of life insurance underwriting in the 1980s, claims Laura Boylan, who leads MassMutual term life insurance underwriting solutions.

A standard life insurance test lasts about 30 minutes and collects height, weight, pulse, and urine specimens as well. Eligibility is restricted for older people and those eligible for coverage exceeding a total annual income of $2 million. and some insurers need a cognitive screening for applicants in their fifties

Lately, according to Adam Boylan, the tests provide valuable life insurance data for those who do it. On the application, the exams will validate the details or reveal potential health conditions that were or could be present at the time of the interview.

Incomplete medical underwriting will categorize all applicants into groups, allowing them to receive a health rate. Many that have better health usually pay less for health insurance.

Why Insurers Offer No-Exam Policies

More and more insurers have begun to sell plans for life insurance over the last decade that require no medical examinations. The change may seem odd, because the removal of the medical test would seem to restrict the number of health insurers. There are, however, some reasons why insurers move away from medical examinations.

Adam Erlebacher, co-founder and CEO of the online life insurance platform, said "the main reason is convenience for the customer." Boylan of Haven Life agrees that the move to non-examination policy is a result of a willingness to facilitate and accelerate the process of life insurance.

The physical exams can also save insurers money – and attract more revenue. The costs of medical examinations for candidates are covered by insurance providers. This lowers the expense of the subscription process by eliminating tests. In addition, insurance companies may target clients who may not have requested protection as they do not want to pass the test procedure, according to a report by the company of actuaries. This makes insurers sell more plans, in other words.

Life insurance firms are able, with a view to predicting a person's probability of death — their life expectancy — to exclude medical exams from the underwriting method.

"Health checkups are necessary but all the available data are much more detailed than an in-time snapshot," Erlebacher said.

Types of No-Exam Life Insurance Policies

There are three major kinds that do not require a medical examination of life insurance policies. Some main differences, including pricing, exist between them. Therefore you must know the benefits and drawbacks of each form if you accept a non-review policy.

Accelerated Underwriting Policies

The accelerated process of signing is closely similar to the whole process of signing. A number of health, family medical history, financial conditions and lifestyle questions will be answered. Insurers collect information from applicants through a number of third-party data sources, as they would in a fully subscribed policy.

They then use data processing to evaluate applicants' risks and to decide whether coverage should be offered.

Instant life insurance authorization without a physical examination is offered to some providers that use accelerated undertakings — such as donations, fabric, Haven Life, and Jenny Life — particularly younger and healthier applicants.

If you are more elderly or are in need of a very high level of coverage (in millions), you may be sent through a more conventional underwriting procedure through a medical examination when you have concerns about your health, for example, over the age of 50 or 60. For quick life insurance, see these options.

The costs can be compared to the costs of an insurance policy that is fully underwritten. For example, for Haven Life's Instant Term policies, Boylan says the rates are the same as for health-care policies. "For a certain rate class everybody pays the same," she says.

The process can be swift, even if you finally have to do a medical exam. For example, Fabric life insurance applicants can schedule an examination online and a medical professional is at home for an examination. The findings are readily available within a few days and within a couple of days after results are received, Erlebacher says, Fabric will decide on coverage.

Accelerated business transactions: The amount of coverage you will get is the drawback of a no-exam accelerated underwriting scheme. The coverage is usually limited to $1 million without a medical examination. However, this may be enough to satisfy your life insurance needs.

Simplified Issue Life Insurance

There is no need for a physician test for simplified life insurance plans. Applicants generally only need to answer a number of questions, including:

• Are you presently in a hospital, a nursing home, a help center or a prison?
• Did you ever have a positive test for HIV or have an AIDS diagnosis?
• Have you ever tested Alzheimer's or dementia positive, or have you been diagnosed with, emphysema or COPD?
• Did cancer (with the exception of basal cell carcinoma), heart attack, stroke or TIA, or alcohol or opioid treatment have you been diagnosed or told to receive treatment within the last 24 months?
• Has your license been suspended or revoked in the last 24 months? Have you been convicted of two or more moving offences, or have you been convicted of driving under or under poison or of driving under impairment for the consumption of alcohol and/or medicines?

Fewer third-party data providers are used to collect information on simpler life insurance applicants. Erlebacher claims that this helps to reduce the cost of insurance.

For a simpler problem policy, you may be turned down. In order to decide whether to issue a policy based on information you provide and information provided by third-party sources, insurers use data modelling. If you apply for the online coverage application, the decision can be instantaneous or, before a coverage decision is taken, you may have to check your application's responses with a follow up phone call.

Simplified issue insurance is more costly than fully covered life insurance – except for stable applicants. Since insurers have fewer details on applicants, premiums are higher, says Boylan. For a simpler problem proposal, she expects to pay at least 20 percent more than for a fully agreed policy.

The sums available for simplified insurance coverage are often usually smaller than the amount you will receive from a fully agreed policy. Haven Life restricts its condensed coverage of the problem strategy to 500 000 dollars or less, Boylan says. According to the Society of Actuaries, most insurers restrict the simplified problem coverage to $100,000.

Guaranteed Issue Life Insurance

Ensured problem You cannot be denied life insurance, or do not need a medical examination or queries – hence the name of the problem guaranteed.

Age is also the only limit of coverage.

The guaranteed problem insurance is intended for older people to help offset the cost of final burial expenses. For instance, AIG's guarantee of whole life insurance policy applicants must be aged between 50 and 85 years old.

Since everybody can get guaranteed life insurance policy irrespective of health, the plan is generally limited to $25,000 or less. And the cost per thousand dollars of coverage is much higher, says Erlebacher. These policies are also known as graded death benefits. If a policyholder dies within two years of being covered the death benefit would be reduced (except for accidental deaths, such as a car accident). The insurer also refunds 110 per cent of the premiums charged to 120 per cent—mainly, with some interest, to reimburse beneficiaries.

Graded death benefits protect insurers against individuals who purchase policies that are already in poor health.

Pros and Cons of No-Exam Life Insurance Policies

Reasons to Get a No-Exam Life Insurance Policy

For many factors, skipping the medical life insurance examination may make sense. Healthy adults wishing to receive coverage rapidly or hesitating a medical examination can receive an accelerated underwriting non examination policy without paying more than the medically-subject examination policy.

For those who need not cover as much and are willing to pay more for the flexibility of a no-exam policy, a simpler policy on the problem might make sense. And a fixed policy on issues will provide a way for older adults with health problems to get a little compensation that helps their loved ones offset ultimate costs.

"Eventually, it's up to choose the product to receive the coverage required," says Boylan.