For many, life insurance is one of the most critical components of a comprehensive financial plan. With the help of life insurance benefits, individuals can transfer the risk of financial loss from a death to a life insurance company. In exchange for premiums paid, the life insurance provider pays a set death benefit that is free from income tax and offers an immediate payout to beneficiaries.
Life insurance proceeds can be used for any financial need beneficiaries see fit, from replacing the income of a spouse, paying for childcare for minor children, or paying off outstanding debts like a mortgage balance. While life insurance is a beneficial part of a financial strategy, it is not always easy to get.
Life insurance companies limit the risk they take on with new life insurance policies by reviewing the health status of applicants. This includes an in-depth review of your health history, family medical history, smoker status, and any details surrounding recent or past medical events. Many of the best life insurance companies require a medical exam as part of the underwriting process.
However, individuals who have health issues do have options for securing life insurance coverage. Life insurance with no medical exam can be a smart choice for those who might not otherwise qualify for coverage. It is important, though, to consider how these types of policies work, the strength of the insurance company offering coverage, the cost of coverage, and the length of time the coverage is in place before accepting a new policy.
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There are a handful of companies that offer life insurance plans without a medical exam requirement as part of the underwriting process. The most popular choices include the following insurers, but make sure to review all your options carefully before choosing.
American National is a nationwide insurance company offering term and permanent life insurance options. Through American National, individuals can apply for a term life insurance policy or a whole life insurance policy without the need for a medical exam. The costs for each policy vary depending on the age of the insured, whether they are a smoker or non-smoker, their gender, and the amount of the policy.
Also, the type of policy affects the cost, with term insurance offering less expensive rates than permanent insurance. Individuals must be between the ages of 18 and 70 to qualify for a term policy, and between 50 and 80 for a whole life policy. Coverage for term policies ranges between $50,000 and $250,000, and between $3,000 and $25,000 for whole life coverage without an exam. A.M. Best gave it a credit rating of “excellent” in 2018.
Through Mutual of Omaha, a national life insurance provider, individuals may qualify for a no medical exam life insurance policy. Mutual of Omaha offers only permanent whole life insurance without a medical exam or health questions. The cost of this type of policy depends on age, gender, and smoker status.
For example, the estimated life insurance quote for a $25,000 policy for a 50-year-old female is $103 per month. Policy amounts are available from $2,000 up to $25,000 without an exam required, so long as applicants are between the ages of 45 and 85. As a permanent policy, the coverage offered by Mutual of Omaha does not expire so long as premiums are paid.
In 2014, Principal, a large financial services company, began offering no medical exam life insurance to qualified individuals. Through Principal, some applicants may be eligible for term or permanent insurance without a requirement to complete an exam.
Principal term and permanent life insurance policies are available to those who are between the ages of 18 and 60 for coverage amount up to $1,000,000 who meet height and weight criteria. Principal life insurance policies without a medical exam do require a telephone interview as well as a check of prescription records and a motor vehicle report. An example of the cost of a term life policy of $200,000 for a 30-year old female is $16 per month for a 30-year term.
In partnership with New York Life, AARP offers a guaranteed issue life policy with no medical exam required. Individuals between the ages of 50 and 80 may apply for a policy up to $25,000 without having to answer any health questions or submit to a medical exam as part of the process.
Applicants must be members of AARP to qualify, and the premiums do not go up nor does coverage go down once in place. The cost of the guaranteed acceptance coverage depends on the age of the insured and gender, as well as the state in which they live. An example of the cost of a $25,000 policy for a 60-year-old female is $128 per month.
For most traditional life insurance policies, the insurance company reviews several factors to determine how much of a risk you present. The most pressing risk is your potential of passing away in the near future, either due to age or current medical conditions. For those who are older or who have serious health issues, a life insurance company is likely to decline an application for coverage.
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In addition to age and health status, life insurance companies also review your medical records with smoking as a determining factor in offering coverage. They also look closely at your family medical history, any health issues you have had in the recent past, and your gender.
Because women have a longer average lifespan than men, premium costs for women are less expensive than for men of the same age. Finally, life insurance companies look at the state in which you live to determine coverage costs. While there are minimal differences in premium prices across state lines, this can play a role in the cost of your life insurance premium.
Individuals who have serious medical conditions are not likely to easily qualify for traditional life insurance policies. This is where coverage options that do not require a medical exam or health questions can be beneficial for protecting against financial losses.
These life insurance companies offer both term and permanent coverage solutions without a medical exam required, however, not all insurance providers have the same application process. In most cases, a paper application or an online application requires information like name, date of birth, gender, and amount of coverage.
For no medical exam policies, there is no need to provide detailed information about medical history, height, weight, or prescriptions. Once completed, an application is then reviewed by the life insurance company and the policy is ready to be accepted within as little as two business days or as long as two weeks. Premium payments start once the policy is in place.
While insurance companies do offer some options for no medical exam underwriting, there are some exceptions for simplified underwriting guidelines. This means that an insurance company does require a few medical questions to be answered, but does not require an exam or blood test if you answer ‚Äúno‚ÄĚ to these questions.
Insurance companies are looking for information that may disqualify an individual from getting simplified issue life insurance policies, such as experience with the following conditions:
Typically, if an event falling into one of these categories has taken place in the last five to 10 years, insurance companies offering simplified issue policies may decline an application.
There are inherent benefits to getting a life insurance policy that does not require medical underwriting, particularly for those with previous medical issues. Insurers do not review these details and instead offer coverage to anyone who applies, so long as they are within the age limits of coverage options available.
Additionally, life insurance that does not require medical underwriting provides fast access to coverage, in as little as two business days for some providers. If there is an immediate need for life insurance, this type of policy with accelerated underwriting can be a great choice.
Individuals also have options for coverage either in the form of term insurance or permanent insurance from some insurance companies. This offers flexibility in the cost of a new life insurance policy, how long the policy coverage is in place, and the amount of coverage available. While these benefits are helpful to some, no medical exam life insurance is not the best fit for everyone.
If you can get coverage through a traditional insurance policy that includes medical underwriting as part of the process, you are likely to pay a lower total cost for the same coverage offered through a no-exam policy. This is because the insurance company can individually evaluate your risk of passing away, and price premiums accordingly for those in good health.
No exam life insurance is also limited in how much coverage you can obtain. For term insurance, the coverage may be up to $1,000,000 without an exam, but the length of the term may be limited to 10 or 20 years. With permanent life insurance, no-exam policies typically stop at $25,000 in coverage. Based on your needs for life insurance coverage, these amounts may not be enough.
Also, no medical exam policies do not offer as much customization as traditional life insurance policies. There are no riders or added features to create more comprehensive life insurance benefits, making the coverage less valuable in some cases. Insurance providers may also put restrictions on when policy benefits may be claimed. For instance, a death benefit may not be paid to a beneficiary if the policy was in place less than one or two years. This can drastically reduce the value of a policy.
Finally, because there is no medical underwriting, life insurance providers build in an additional cost for the risk they take on with new policies. This means the price paid for premiums each month or each year may be significant.
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For individuals who have health issues that may stop them from applying and getting approved for a traditional life insurance policy, no medical exam policies can be a smart option for coverage. However, it may also be beneficial to plan for final expenses in advance.
Financial expenses can include outstanding debts, such as a mortgage balance or medical debt, or funeral and burial costs. While life insurance death benefits can help offset some of this financial burden, no medical exam policies may not be enough to pay for all necessary costs at the end of one‚Äôs life.
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Also, it is necessary to consider the value of term insurance toward the end of one‚Äôs lifetime. Because term insurance is temporary and expires after the set period of time offered by the insurance company, this type of coverage may not prove valuable when the time comes.
If the term has expired, the insurance coverage is no longer in place, meaning your loved ones would not receive any death benefit proceeds. Planning for expenses late in life is best done through saving and through permanent life insurance. So long as premiums remain paid as agreed, the permanent life insurance policy pays out to beneficiaries after the insured passes away.
No-exam insurance can be a helpful tool for covering late life expenses, especially for those with previous health issues, weight issues, or financial restrictions. Both no-exam term life insurance and permanent life insurance options are available from some life insurance providers, although the cost and the amount of coverage available varies from one insurer to the next.
Consult with an insurance agent who can help you choose. And before selecting an insurance policy that does not require a medical exam, be sure to consider the long-term costs compared to the benefit it may provide to beneficiaries in the future.