Unlike traditional term, universal or whole life insurance, no medical exam life insurance does not require that you submit to blood & urine testing or a physical examination. You do have to answer health & lifestyle questions as part of the application process, however, so your overall risk level is still taken into consideration.
As with anything, there are pros & cons to no medical exam life insurance, also known as “non-med”. Many insurance companies offer quick underwriting turnaround times, allowing you to put coverage in place a lot more quickly than you could with a fully underwritten policy. A lot of non-med policies also include living benefits at no additional cost.
On the flip side, no medical exam life insurance can be more expensive than their fully underwritten counterparts. This isn’t always the case, however, and will depend on your health, lifestyle and overall risk profile.
There are a few types of life insurance policies that fall under the non-med category, including simplified issue, guaranteed issue (GI) and group (which is usually offered by certain employers or labor organizations). This article discusses simplified issue. You can read more about GI here.
Benefits of no exam life insurance:
- Quick to place in force
- Streamlined process = less effort on you
- Often includes living benefits
- No needles/blood draws
- Similar cost for the young & healthy
Drawbacks of no exam life insurance:
- Can be more expensive than fully UW policies
- Death benefit typically limited to $500k
- Max death benefit is tied to your age
- Shorter available terms for older people
Is it really that much quicker?
Putting a fully underwritten life insurance policy in place takes time. 4-8 weeks is typical, if all goes well. Aside from the medical exam, the insurance company will typically research your prescription history, look into your record with the Medical Information Bureau (MIB), your driving record, criminal record and credit, among other things. It’s a very thorough process since insurance companies have a vested interest in evaluating your level of risk before taking it on. One of the requirements that can really slow down the process is the APS (Attending Physicians Statement). This is requested of your primary physician, but can also be ordered from any specialists you’ve seen for treatment. Waiting times for APS can often add weeks to a life insurance application process. If dealing with the department of Veterans Affairs, it usually turns to months.
With most no medical exam life insurance policies, if you’re in good overall health, an APS will not be ordered. The insurance company relies on your answers to the application questions, as well as other sources listed above. This allows for much quicker underwriting times and can get you covered in just a few days or weeks, instead of months. This can be very useful if you’re on a deadline to obtain coverage. Non-med is often recommended for divorce settlements and business loan collateral cases for example, when time is of the essence.
Streamlined process = Less effort on your part
Applying for a fully underwritten policy means taking time out of your day to meet with a nurse for a medical exam, blood & urine sample collection and in-depth questionnaires. There are often follow-up questions and requirements that come up as the insurance company’s underwriter reviews everything. Of course, this isn’t the end of the world, but if you’re extremely busy and can’t find the time for things like regular haircuts and teeth cleanings, then maybe a streamlined process is a better fit. This really becomes of a matter of personal preference for most people.
What are living benefits?
Living benefits are a relatively new feature to life insurance. At their essence, they provide access to a portion of your death benefit while still living, if certain events occur. Many no medical exam life insurance policies include living benefits at no additional charge. These are typically riders that cost extra on fully underwritten policies.
Living benefits, also known as “accelerated benefit riders”, give you the option to accelerate the death benefit in the event of a serious illness. Most policies will include:
– Chronic illness
– Critical illness
– Terminal illness
As an example, if you’re diagnosed with a terminal illness with less than 12-24 months to live (each policy is different), you can request a portion of your death benefit. Each policy specifies a maximum, but most of our carriers allow 90-100%. The money can be used as you see fit, with no restrictions. The death benefit is reduced by that amount of course.
Many policies include loss of limb in the critical illness category, which basically acts a dismemberment rider. One of our top carriers also includes an unemployment rider that allows you to wave up to 6 months of premium payments. To be eligible to use that particular rider, you must be unemployed for a period of at least 4 weeks and receiving state or federal unemployment benefits.
No needles/no blood draws
Some people are just not comfortable with needles or giving blood. Some have small veins that are difficult to find and giving blood becomes a painful process. Some are simply afraid of getting poked with a syringe. Whatever the reason, no medical exam life insurance policies allow you to bypass that step altogether.
* our medical examiners aren’t scary and they don’t wear weird masks *
No scary needles no blood draw
In most cases, the cost difference is negligible
If you’re young and healthy and only need up to $500K in coverage, then no medical exam life insurance is often not much more expensive than fully underwritten. It can actually be a better value when you consider the included living benefits of most policies.
On the other hand, if you’re older and have a few health issues, then it will typically cost substantially more than the same amount of fully underwritten coverage. Each situation is different so we always compare options during a consultation.
Lower available death benefit options
The upper limit on most no medical exam life insurance policies is $500,000. If you need more coverage, a fully underwritten policy is the way to go.
This of course is further limited by your age. A common breakdown is as follows, although each carrier sets these limits for their products internally. The best carrier for your specific situation may have different limits.
|18 – 50||$25,000||$500,000|
|51 – 60||$25,000||$400,000|
|61 – 70||$25,000||$300,000|
|71 – 80||$25,000||$150,000|
Shorter term length if you’re older
Available term lengths are lower for most non-med policies than they are for fully UW options, especially if you’re over 60.
A common breakdown is as follows, although each carrier sets these limits for their products internally. The best carrier for your specific situation may have different limits.
|18 – 55 (non-tobacco) 18 – 50 (tobacco)||10 years||30 years|
|51 – 65||10 years||20 years|
|66 – 70||10 years||15 years|
|71 – 80||10 years||10 years|
How do I get started?
-Danny Gallant, Life Insurance Broker
firstname.lastname@example.org | 512-922-1273