How Life Insurance with No Medical Exam Works

Do you need life insurance, but you’ve been delaying applying because you’re uncomfortable with a medical exam? If so, you’re not alone. And for that reason, the life insurance industry has created a different way to apply that does not involve a medical exam.

Applying for life insurance with no medical exam can be more expensive, have a lower death benefit, or shorter terms than traditionally underwritten policies. However, it does allow you to apply for life insurance even if you can’t go through a medical exam. An option is better than no option.

Table of Contents
  1. What is Life Insurance with No Medical Exam?
  2. How Does Life Insurance with No Medical Exam Work?
  3. What Are the Different Types of Life Insurance with No Medical Exam?
    1. Group Life Insurance
    2. Simplified Issue Life Insurance
    3. Final Expense or Guaranteed Issue Life Insurance
  4. How Much Coverage is Available with Life Insurance with No Medical Exam?
  5. How Much Does Life Insurance with No Medical Exam Cost?
  6. The Pros and Cons of Life Insurance with No Medical Exam
  7. Where to Get Life Insurance with No Medical Exam
    1. Bestow
    2. HavenLife
  8. Final Thoughts

What is Life Insurance with No Medical Exam?

Life insurance with no medical exam is exactly what the name implies. It’s a life insurance policy where the insurance company does not require the applicant to submit to a medical exam. That kind of policy can be a relief to an individual who has a fear of doctors and medical exams.

But just because a life insurance policy requires no medical exam doesn’t mean health considerations are ignored.

Not only could you be required to answer a large number of health-related questions on the application, but the company can also perform a search of available health databases to determine the status of your health based on third-party sources.

They review information from dedicated health insurance databases and investigate specific health events that raise questions. They may also check your driving record with the state, perform a criminal background check, obtain a copy of your credit report, and any other information they deem necessary to make an informed decision in underwriting your application.

Because the insurance company does a detailed investigation of information about your health, life insurance with no medical exam is not an alternative if you simply want to avoid disclosing a specific health condition. The insurance company will likely discover it even if you don’t disclose it and, if discovered after you pass away, can deny your claim.

How Does Life Insurance with No Medical Exam Work?

Insurance companies may target applicants who are young and in good or excellent health for no medical exam policies. Both statuses reduce the risk of early death by the applicant and the payment of the death benefit by the insurance company.

Life insurance with no medical exam is usually offered as term life insurance only. Those terms may be more limited than fully medically underwritten policies as well. For example, while a fully medically underwritten term policy may be available for 30 years, a no medical exam policy may be available for only 10 or 20 years.

Here’s how to determine if term or whole life insurance is best for you.

What Are the Different Types of Life Insurance with No Medical Exam?

Life insurance with no medical exam comes in several forms. Three examples include:

Group Life Insurance

Typically offered by employers, trade unions, and certain professional groups, group life insurance is available to participants with no medical exam, and no medical qualification. You’ll be admitted into the plan and covered as a result of your affiliation with the employer, union, or professional group. You don’t have to meet any criteria on an individual basis.

If group life insurance is provided by your employer, the premiums will typically be paid by the company as an employee benefit. The employer will typically pay up to a certain maximum, which is generally between $50,000 and $100,000. You’ll be eligible to purchase additional coverage, but you’ll have to pay the premiums out of your own pocket.

The disadvantage with employer-sponsored life insurance plans is the limited benefit. If you earn $50,000 per year, you’ll likely need at least $500,000 in life insurance coverage. A $100,000 policy offered by your employer will meet only a small percentage of that need.

However, if you obtain coverage through a trade union or professional group, you’ll likely pay the premiums directly. Those premiums will be lower than similar coverage available to non-members because the insurance company has determined that the group is one with an acceptably low mortality rate, enabling them to charge lower rates. In other cases, the union or the professional group may subsidize the cost.

Simplified Issue Life Insurance

Simplified issue life insurance typically comes without a medical exam, but it’s still a medically underwritten policy.

On the life insurance application, you’ll need to complete a series of questions regarding your health condition. Those questions can be quite detailed, even requesting information about alcohol consumption and recreational drug use.

In lieu of a medical exam, the insurance company will rely on available databases, such as the MIB. That’s something like a credit report for health profiles that’s used extensively by the insurance industry. But they may also request specific information from certain healthcare providers, as well as obtain a copy of your driving record with your state Department of Motor Vehicles, pull your credit report, and even perform a criminal records search.

If they determine there are health conditions, high-risk hobbies or habits, or negative personal history, it may determine you’re not eligible for simplified issue life insurance. In that case, you may be offered a fully medically underwritten policy.

The biggest disadvantage to simplified issue life insurance is that it’s a limited policy. They’re almost always term policies and may be limited to not more than 20 years. There’s also a limited death benefit that may max out at $500,000 or $1 million. If you need more coverage, or a longer-term – or even permanent life insurance – simplified issue life insurance won’t be the policy for you.

Final Expense or Guaranteed Issue Life Insurance

Some applicants are in such poor health that they can’t qualify for traditional life insurance policies, let alone traditional life insurance with no medical exam. However, such applicants can purchase guaranteed issue life insurance – sometimes referred to as final expense insurance – with no medical considerations at all.

Not only will there be no medical exam, but they won’t be asked any medical questions either. That’s the whole purpose of the word “guaranteed” in guaranteed issue life insurance. You’ve probably even seen these policies advertised on TV (“You cannot be turned down for coverage”).

They’re not without limitations, however. For example, policies are available only to applicants between the ages of 50 and 85. They’re whole life policies, which makes them much more expensive than term insurance.

An even bigger limitation is the death benefit. Most top out at $25,000, but there are a few that will go to $50,000. That’s where the name “final expense” comes into the picture. A death benefit of that size will pay little more than a final expenses at death. Little be available to provide for the policyholder’s beneficiaries.

There’s yet one more limitation with guaranteed issue life insurance, and that’s what’s known as a graded death benefit. Since the insurance company is writing the policy without regard to your health, the death benefit is not paid during the first two years of policy is in force. If you die within that time, your beneficiaries will receive a return of the premiums paid, plus interest.

The premium on a guaranteed issue life insurance policy is higher on a per thousand basis than it is on just about any other type of life insurance. The premium on a $25,000 guaranteed issue life insurance policy may cost several thousand dollars per year.

How Much Coverage is Available with Life Insurance with No Medical Exam?

This is one of the more important limitations of life insurance with no medical exam. While you may be able to get a death benefit of several million dollars with a fully medically underwritten policy, no medical exam policies limit the death benefit to a much lower amount.

For example, the same company that offers $5 million in coverage for a fully medically underwritten policy may cap a no exam policy at just $500,000. Some of the more generous providers, like Bestow (see below), specialize in life insurance with no medical exam and will go as high as $1 million.

How Much Does Life Insurance with No Medical Exam Cost?

The short answer: more than a fully medically underwritten policy.

By providing life insurance with no medical exam, an insurance company is assuming greater risk than they will in the case of a fully medically underwritten policy. For that reason, they charge a higher premium.

Undoubtedly, the medical background check performed by the insurance company will reveal the most health-related information on any applicant. But the medical exam is the only aspect of the application process that can definitively tell the insurance company the exact health status of the applicant as of today. Forgoing that step increases the risk to the insurance company.

For that reason, you should expect to pay at least a slightly higher premium for life insurance with no medical exam. In a typical scenario, you’ll be assigned a Standard risk classification, rather than a Preferred Plus or Preferred rating, even if you’re in excellent health.

The Pros and Cons of Life Insurance with No Medical Exam

Pros:

  • If medical exams make you nervous, this type of policy will eliminate that problem.
  • The absence of a medical exam means faster approval and policy issuance.
  • You won’t need to clear time in your schedule for a visit from the insurance company nurse.

Cons:

  • Costs more than an equivalent amount of coverage under a fully medically underwritten policy.
  • Shorter terms than fully underwritten policies.
  • Lower death benefit.
  • Term coverage only, rarely available for permanent insurance coverage.
  • You must be younger and in good or excellent health to qualify.

Where to Get Life Insurance with No Medical Exam

Many companies offer a no medical exam option, but in most cases, those plans are highly limited. On the other hand, some life insurance providers specialize in life insurance with no medical exam. If your preference is for a policy with no medical exam, you’ll want to check out any of the following providers:

Bestow

Bestow could be the single best choice in life insurance agencies if you’re looking to get life insurance with no medical exam. That’s because they virtually specialize in this type of coverage. The entire application process takes place online, and you can literally be approved for a policy in a matter of minutes.

Bestow is part of a growing number of online, life insurance “fintechs”. These are companies that operate entirely online and use non-traditional life insurance underwriting methods, relying primarily on technology. For example, rather than requiring a medical exam, they instead rely on the wealth of health information available from medical databases.

Bestow offers term policies only, with terms of 10 or 20 years. Policies are available from a minimum of $50,000 to as much as $1 million. They offer life insurance in every state in the country except New York, and without requiring a medical exam on any.

But be aware that part of the reason Bestow offers no medical exam policies is in their target customer base. They offer coverage to young, healthy applicants, which reduces the need for traditional underwriting methods. For example, 10-year policies are available only up to age 55, while 20-year policies are available only at the age 45.

But if you’re young, healthy, and would prefer to avoid a medical exam, Bestow is an excellent choice for life insurance. Check out our full review here.

Get a quote from Bestow

HavenLife

HavenLife is another life insurance fintech. Much like Bestow, the application process takes place completely online and is much quicker than traditional life insurance applications. However, the company’s life insurance policies are issued through MassMutual, one of the oldest, largest, and most respected life insurance companies in the country.

Life insurance with no medical exam is not an across-the-board feature of HavenLife policies, but it does apply to many applicants. In fact, the company offers its Haven Simple policy, which requires no medical exam and is available to eligible applicants between 20 and 55. You can choose coverage between $25,000 and $500,000.

But perhaps more significantly, HavenLife offers more generous fully medically underwritten life insurance plans to a larger number of applicants. Haven Term offers death benefits that range from a low of $250,000 to as much as $3 million. What’s more, HavenLife offers policies to adult US citizens up to age 64, though the maximum death benefit you can get between the ages of 60 and 64 is $1 million.

But just like Bestow, the policies they offer are strictly term life insurance. All come with an accelerated death benefit, enabling a terminally ill policyholder to access part of the death benefit to cover expenses prior to death, as well as automatic renewability on an annual basis once your term has expired.

Perhaps because of its affiliation with MassMutual, HavenLife may be more likely to approve an applicant with certain health conditions than most other life insurance fintechs.

Get a quote from Havenlife

Final Thoughts

If you’re absolutely terrified at the prospect of submitting to a medical exam – and some people are – you should seriously consider life insurance with no medical exam.

But given all the limitations, including a higher premium, lower death benefit, shorter policy term, and the requirement to be young and in good or excellent health, it’s likely you’ll be better served by taking the medical exam and getting all the benefits of a fully medically underwritten policy.

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About Kevin Mercadante

Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed "slash worker" – accountant/blogger/freelance blog writer – on OutofYourRut.com. He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides "Alt-retirement strategies" for the vast majority who won’t retire to the beach as millionaires.

He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering workarounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the "savings barrier" and transitioning from debtor to saver.

Kevin has a B.S. in Accounting and Finance from Montclair State University.

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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