Is No Exam Life Insurance the Right Choice for You?
Buying life insurance is one of the best decisions you can make as an adult. Life insurance offers financial coverage for your loved ones in case the worst should happen. It’s a gift to them, and also to yourself, since it affords peace of mind. The main challenge of life insurance is deciding which type of policy to buy. There are many types of policies on the market, but one of the most popular types is no exam life insurance.
No exam life insurance makes it possible for people with serious health issues to get coverage that can protect their families. In the past, these people simply couldn’t get insurance. Now they can, and more than that, they have a variety of options to choose from.
The Cost of No Exam Life Insurance
When no exam policies first appeared on the market, they were very expensive. No exam policies allow you to skip the medical exam aspect of the application process, but more than that, they don’t dig deep into your medical history or require detailed medical information. While this makes the application process a lot easier, it also means that insurance companies are taking on greater risk. If they don’t know how healthy you are, you may have a high risk of mortality and the company will then need to pay out. To counteract this risk, insurers made the prices of no exam life insurance very high.
Today, however, that’s not always the case. While certain types of whole no exam policies still are expensive, term policies now offer very competitive rates. Insurers are able to do this because they collect information about applicants through third-party sources (with the applicant’s permission, of course). This way they are able to get copies of previous life insurance applications, pharmacy records, DMV records, and credit ratings. Since they can gather all this information, they are able to offer more competitively-priced policies. You can get a free quote here and see how much a no exam policy would cost you.
Benefits of No Exam Life Insurance
There are several benefits of no exam life insurance, which is why these policies are growing in popularity.
Traditional life insurance policies have an underwriting period between 4-6 weeks. No exam policies are not fully underwritten, which means approval time is quicker. For certain whole no exam life insurance policies, there is zero underwriting and approval can be immediate. For term no exam policies, there is partial underwriting, so approval can take a few days or several weeks. In both cases, the approval time is faster than that of traditional life insurance.
Why do people need life insurance quickly? Many reasons. They may be:
- Traveling abroad
- Applying for an SBA loan
- Going through a divorce and need life insurance as part of the settlement
- Impatient and don’t want to wait so long to get coverage
No Medical Exam
People with an extreme fear of needles, also known as trypanophobia, cannot bring themselves to undergo the medical exam that’s required for traditional life insurance policies. This is because the exam includes a blood test, which can be a traumatic event for people who are scared of needles. No exam policies allow them to skip the medical exam and still get coverage.
People with serious health conditions may be turned down for traditional policies. Whole no exam life insurance applications don’t ask for any health information. In fact, anyone who applies is approved, as long as they are under the age limit designated by the insurer. This is a blessing for people who have been turned down for traditional policies but still want something to pass on to their loved ones.
In some cases, whole no exam life insurance is used as a type of final expense insurance. This means that coverage is designated to cover funeral/burial costs, which typically range between $7000 and $12,000. This type of life insurance ensures that the burden of final expenses won’t fall on your loved ones.
Factors to Consider When Deciding Which Type of Life Insurance to Buy
No exam life insurance has many benefits, but it also has some shortcomings. Whole no exam life insurance can be very pricey, which is enough of a reason for people not to buy it. Term no exam life insurance, on the other hand, can be very affordable for people who are in relatively good health. Another downside of whole no exam life insurance is that coverage is usually limited to $25,000. Term no exam policies offer coverage up to $500,000 or $1 million. People who need more coverage will probably need to get a different type of policy.
When considering which type of life insurance policy is best for you, factors to consider include your age, health condition, the financial situation of your loved ones, and whether you have any debts. These considerations can help you determine whether no exam life insurance is right for you.