If you dread the thought of having a life insurance medical exam in order to buy a policy, you're not alone.
The life insurance application process often includes a life insurance medical exam. Many people would prefer to skip the blood pressure check and blood and urine tests.
Buying a life insurance policy can take a month, or more if your insurer has questions or is waiting for medical records from your doctor. About half of consumers (51%) think that a faster sign-up process is very or extremely important when buying life insurance, according to LIMRA, an industry research group.
There are several ways to buy no-exam life insurance. The main differences are in price levels, the amounts you can buy and what kind of personal information they use.
Ways to buy life insurance without a medical exam
|Simplified issue||No||A few|
|No-exam and accelerated underwriting||No||Yes|
|Instant, online term life insurance||No||Yes|
Guaranteed issue life insurance
Summary: You can't be turned down for a guaranteed issue life insurance policy. There are no medical exams or questions asked. Your premiums won't increase.
What to know: Maximum policy amounts could be as little as $25,000 or $100,000. You'll pay a lot for the convenience of having no exam or questions. These policies are generally for people over age 45 or 50, and up to age 85, who think they'd be turned down for life insurance otherwise.If you have some health issues, don't assume you'll be turned down for other policies and rush into a guaranteed issue policy. Have an independent insurance agent run some quotes for you.
Guaranteed issue policies typically don't pay out the full death benefit until at least a few years into the policy. This prevents insurers from having to make payouts for terminally ill people who buy policies knowing they don't have long to live. Check the policy language for these "graded death benefits" -- it will outline what percentage of the full death benefit is paid if you die within the first years of the policy.
Examples of guaranteed issue sellers: AIG, Colonial Penn, Globe Life, MassMutual, Mutual of Omaha and others.
Simplified issue life insurance
Summary: Simplified issue policy applications ask a few questions but have no exam. If you answer yes to answer any of the questions you'll be declined. Questions vary by company but can include things like "Do you smoke" or "Do you reside in a nursing home?"
What to know: Simplified issue policies are less expensive than guaranteed issue life insurance but still pricey. You won't be able to buy a lot of coverage this way. The maximum policy amount might be $500,000 or much less, depending on the company
Examples of simplified issue sellers: AAA, Amica, John Hancock, New York Life and others.
No-exam and accelerated underwriting life insurance
Summary: These products let you skip a medical exam and get a policy faster. They can offer better pricing because they use personal information, including medical information.What to know: The life insurance company will pull a variety of information about you, without you lifting a finger. The insurer will likely look at your MIB file (which contains information from any past individual life or health applications), your prescription drug history (via a pharmaceutical database) and your motor vehicle record.
Poor health could be a hurdle. The insurer might still ask for an exam if it doesn't like the information that comes back.
You may be able to buy a policy for up to $500,000, $1 million or even $2 million, depending on the company. If you're interested in this type of accelerated underwriting, ask an independent life insurance agent to get quotes from companies that offer it.
Examples of no-exam and accelerated underwriting sellers: Banner Life, Brighthouse Financial, Fidelity Life, Lincoln Financial, Principal, SBLI and others.
No-exam life insurance rates
We compared regular and no-exam life insurance prices for a $500,000, 20-year term life insurance policy. At younger ages, a no-exam policy costs only a few percent more than regular policies.
|Gender and age||20-year $500K term life annual cost||No-exam 20-year $500K term life annual cost|
|Male age 30||$309||$326|
|Male age 40||$352||$436|
|Male age 50||$898||$1,084|
|Female age 30||$257||$266|
|Female age 40||$304||$366|
|Female age 50||$668||$851|
|Source: EverQuote research. We average the three cheapest rates found. Rates are for men and women of average height and weight, in very good health. Your own rates will be different.|
Instant, online term life insurance
Summary: There are a few companies carving out a new type of life insurance: Term life with instant approval, bought entirely online, that's fully underwritten. It's possible to get a policy in 10 or 20 minutes. Fully underwritten policies can offer the most competitive pricing because they use personal information.
What to know: These companies will quickly calculate a premium for you based on personal data pulled from MIB, your motor vehicle report, prescription-drug databases and other sources. You could still be asked to do a medical exam if your health status is iffy.
Policies are available up to $1 million or $2 million, depending on the company. It's ideal for healthy people up to age 60 or 64 (depending on the company) who don't want to bother with a medical exam.
Examples of instant, online term life sellers: Haven Life, Ladder, SoFi.
Group life insurance through work
We shouldn't forget the easy life insurance offered by many employers. There's no exam or application for group life, and you can't be turned down. It's an inexpensive way to buy life insurance.
What to know: Amounts can be very limited, possibly to an amount equal to only one year of salary. Some employers offer the option to buy supplemental group life. This typically requires an application but is also an inexpensive way to buy life insurance. The downside is that you lose the coverage if you leave the job.