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Are There Life Insurance Options Without an Exam?

Life insurance is always an important type of policy to have in place for your loved ones.  As a home-based business owner, you have many logistical tasks to take care of and don’t want to worry about figuring out the best life insurance options. When you first start researching different plans and options, you’re going to want to be sure you are getting the best type of policy as possible to properly insure your family.  Every individual is different, and will have different financial objectives.

One of the most popular options out there are what’s considered a non-medical exam policy.  Like the name suggests, the application of insurance is underwritten without you taking a medical exam.  There are multiple types of non-medical exam policies, and they will all be different depending on your goals for the life insurance.

What Are the Pro’s and Con’s?

One of the main advantages to a non-medical exam policy is the time it takes to have an application approved.  Traditional underwriting normally takes 30 to 45 days for an insurance company to make a decision.  With non-medical exam policies, it may just take a few minutes, or days to get an approval.  If you are the type of person who is impatient, then this policy would be a good fit.  Or if you don’t want an underwriter going through your medical records or blood test results, then a non-medical exam policy would be ideal for you.

To qualify, insurance companies will have you answer a health questionnaire.  They will also do a prescription drug background check, MIB (Medical Information Bureau) review, and some companies will even do a Motor Vehicle Review report to check your driving record.  These background checks are conducted to make sure the answers you provided on the application match up, and are accurate.

Most non-medical exam plans also are designed to cover people in average, to preferred health.  Surprisingly, people with some health conditions such as type 2 diabetes can be approved for life insurance coverage.  Having flexible underwriting is another reason these plans are becoming more and more popular.

With these types of policies, there are some drawbacks attached to them.  The first disadvantage is that companies are going to “limit” the amount of insurance they will offer.  Some companies may offer up to $500,000 in coverage, while a couple others may go up to $1,000,000.  This may or may not be an issue depending on your financial situation.

Also, since the insurance company isn’t going to be getting lab results or medical records, they will end up charging you higher premiums.  Without taking a medical exam, the insurance carriers are undertaking a greater risk, and will pass along those costs to the policy holder.  If you are looking for the absolute lowest priced premiums, these are not the best solutions for you.

Coverage Through Your Employer

One of the easiest ways to obtain non-medical exam coverage is to look to your employer’s group policy.  Almost every employer offers a plan to their employees.  Since the “group” policy is covering all employees, the premiums will usually be lower compared to applying for a policy outside of the group umbrella.  Having group life insurance coverage is always a nice perk, but generally not smart to have all coverage tied to your employment.

With your group life insurance, you will again be limited to amount of insurance offered.  This coverage is often times tied to your annual salary.  The amount offered to you may not be enough to protect your family.  Rates are also not guaranteed.  Your group plan could have future increases in premium, or the plan could be canceled should your employer decide to do so.  These group policies usually are not portable either.  If you left your job, or retired, that coverage may no longer be there.  Group insurance is a good place to start with coverage, but it should not be your only policy in place.

Guarantee Issued Life Insurance

Another option for you is a guarantee issue plan policy.   Not only do these types of policies not require a medical exam, they also do not ask any type of health question to qualify for coverage.  You cannot be turned down for coverage, as everyone regardless of their health is eligible.  These policies are usually designed for people who are not in the best health, and for people who may want to address their funeral costs and use life insurance for final expenses.

Due to insurance companies not asking any health questions, they will limit the amount of insurance offered to $25,000 to $40,000 per insurance company.  Also, if death occurs in the first 2 policy years, the beneficiary of the policy would receive all premiums paid into the policy, plus 10% interest.  Then after 2 full years, the death benefit is paid out in a lump sum, and tax free manner.  Premiums are also much more expensive for these products, compared to traditional whole life insurance policies.

Nobody can ever predict their future, so it is always important not to put off getting life insurance protection.  You can always start with one type of policy, and switch to another in the future.  So contact an independent insurance professional, and get the initial process started.

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