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No Medical Exam Life Insurance: Reasons to Buy or Avoid it

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Life insurance is one of the sensible choices for many people hoping to support their beloved ones financially. In most cases, when you purchase an insurance policy, you have to take medical exams. Most insurance companies want to assess the risks you may pose to them before deciding to offer you a policy. However, others provide insurance policies without any requirement for medical checkups.

What are the differences between these policies and those requiring medical exams? What are popular types of no medical exam life insurance? When should we purchase these policies?

What Is No Medical Exam Life Insurance?

Typically, you are required to complete paperwork and provide your medical exam results when applying for a policy. The information about your health, lifestyle, and habits helps the company define the insurance policy they will issue for you. If you have any health problems, the company can decline your application or raise your premium rates.
If you want to escape paperwork and medical checkup, you can opt for a no-medical exam insurance policy. Specifically, you can be free from tedious and time-consuming medical exams but still get coverage. Without any exam requirement, insurance companies will use other data such as your health question answers or prescription history to evaluate your insuring risks.
No exam life insurance policies often cost you more than those requiring medical exams. But in general, the prices may be variable. Some are geared to those whose medical issues reduce their chances of making a traditional insurance purchase, while others target young, healthy individuals who prefer a quick application process.

Which Life Insurance plan offers No-medical Exam policy?

Typically, you can select no-medical exam term life or no-medical exam whole life insurance, consisting of two kinds of the final expense policy.

No-medical term life insurance

No-medical term life insurance is a term life insurance policy with no medical exam requirement. It offers you lower face value, but you can still purchase enormous amounts from $250,000 to $500,000. If you pass away within the policy term, such as 10, 20, or 30 years, you will receive a death benefit. 

You can quickly get term life insurance quotes without taking medical exams, but you may have to answer a few medical questions. Your answers may help the insurer calculate your premium rates. It appears to be a quick and straightforward method to get term life insurance. However, since the insurer does not have deep insight into your health, they may charge you higher premium rates.

No-medical whole life insurance

Guaranteed issue life insurance

Guaranteed issue life insurance requires no medical questionnaire and physical checkup. It is popular among seniors whose health conditions make it hard for them to apply for a simplified issue policy. However, the trade-off is higher premium rates and smaller death benefits. If you die within the policy’s waiting term, you will only be paid a death benefit worth 110% of your premiums. 

This kind of insurance is not suitable for most people, and it should only be purchased as a last resort. In fact, many better options are out of reach for those with poor health or too old. Thus, these people can resort to a guaranteed issue insurance policy to obtain much-needed coverage.

Simplified issue life insurance

Applicants need to be in good health to apply for the simplified issue life insurance. Like no exam term life insurance, it may require you to answer some health-related questions and provide a prescription history. Your health will have to be checked up more thoroughly if you have pre-existing conditions. Therefore, anyone who applies may run the risk of being declined. 

Unlike standard whole life insurance, this kind of life insurance comes with a lower death benefit than that of no exam term life policy. It also has no cash value component, and the face value is around $50,000 in maximum. Therefore, no-medical whole life insurance is the most appropriate for those needing low coverage. 

The following chart reveals a few differences between popular no-exam life insurance policies and traditional term life insurance.

Policy detailsTraditional term lifeNo-medical exam term lifeSimplified whole lifeGuaranteed issue
Waiting periodAverageFastFastVery fast
Coverage$25,000 – $10 million$50,000 – $2 million$40,000$25,000
TermUp to 30 yearsUp to 30 yearsPermanentPermanent
AgesUp to 85Up to 65Ages 45 – 85Ages 50 – 85
The information above is based on available average quotes given by Canadian carriers as of March 2021.

How Much Does a No Exam Life Insurance Policy Cost?

The prices of no medical exam life insurance policies mainly depend on your living area, age, gender, and policy type. For instance, for a 50-year old senior in Canada, the monthly premium rates of no exam life insurance can range from $3.49 to $134.44. Generally, the older you are, the higher risk you pose to the insurer, so you have to pay higher premium rates. 

Additionally, it is worth noting that you have to pay more for no exam life insurance than those getting the same protection level but taking medical exams. For example, guaranteed issue life insurance may cost you up to twice as much as traditional exam life insurance. Understandably, insurance companies charge you higher for more potential risks they may run when insuring you. 

When To Buy No-medical Exam Life Insurance?

While a no-exam policy can be quick, convenient, and affordable, it is still not the right option for many people. Only those in the following situations should consider buying no-medical exam life insurance.

  • Those with health problems: For people with pre-existing medical issues such as diabetes, traditional life insurance can be impossible and expensive. Thus, it would be rational to get a guaranteed-issue life insurance policy. 
  • Those preferring a fast application process: It can be a time-consuming underwriting process for many if they select a conventional life insurance. Hence, no exam life insurance can meet their need for a convenient and rapid application procedure. No exam insurance policies can be issued in just a few days after you submit your application.
  • Those with risky occupations: For people who have risky jobs or dangerous hobbies, it can take time and effort to apply for a policy that uses a complete underwriting process, even when they are in good health conditions.
  • Those needing burial coverage: Seniors who need burial cost coverage can get no exam life insurance. For example, a 50-year-old man with a moderate risk who is not eligible for traditional life insurance can resort to no exam life insurance. This policy offers a small death benefit to cover his burial expenses when he passes away. 

If you are not in those circumstances, no exam life insurance policies are possibly not a reasonable option. Especially if you are young people with financial responsibilities, you can choose traditional insurance types to receive better financial support for your dependents and higher death benefit. More importantly, since life insurance companies have different requirements for no-medical exam insurance policies, you can shop around and compare before making your purchase. You can also contact us to get quick and free advice on the best insurance policy for your situation.

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