Have questions about the best no medical coverage?
No medical life insurance is a product that many people are just learning about. What is it? No medical life insurance is a type of life insurance policy with no medical visits required and fewer (if any) health questions than traditional plans. While some people think of them as being more expensive than traditional plans, for people who would otherwise have rated plans (a rating occurs when someone has a health condition that creates a higher risk of early death, so a rating is a applied which results in higher premiums) these policies are often more affordable. The only time they are higher than traditional plans is when the person being covered is healthy.
There are two types of no medical policies available: guaranteed issue and simplified issue plans. Guaranteed issue plans are just that: guaranteed. There are no health questions, no nurse’s visits or doctor’s reports and no underwriting, so people can receive coverage immediately. Even people who have been declined insurance in the last two years can get coverage through these plans, although the death benefit can max out between $100,000 (Assumption life) and $300,000 (Humania). This means that if someone needs more coverage, it might be best to look at a simplified issue plan. With a simplified issue policy, there is list of health questions, and policies are underwritten, meaning that coverage won’t be immediate. There is more coverage, but if a person has been declined in the past two years, they can expect a two-year limited benefit provision on the plan.
More insurance companies are beginning to carry these policies as the demand for them seems to be growing. Because of this interest in these policies, NoMedicalLifeInsurance.ca has asked several insurance experts their thoughts on this topic.
- Tamara Humphries, a certified financial planner and the creator of nomedicalinsurance.ca;
- Brian So, a financial advisor with IPC Investment Corporation;
- Jackelyn Ford, owner and operator of J. Ford Financial;
- Craig Ferguson, an insurance advisor with Benefits Ontario;
and from our sister site LSM Insurance we have:
- Andrew Burdi, LSM Insurance’s living benefit specialist
- and William Shung, an elder planning counselor and life insurance specialist
So the first question is: In your opinion, who has the best no medical life insurance policies, and why?
Tamara: It depends on the condition the person has. Each insurer views the risks of each health condition differently, so the questions are different for each company. To add to the confusion, the companies also have different questions for their various policies. So term policies have different questions than permanent policies even within the same company. The company and plan the consumer chooses will really depend on how the person can answer the questions of the specific insurer. There is no catch all company that is the best. It depends on what the person wants and needs for coverage as well as the medical condition and stability.
Brian: It all depends on what your individual situation calls for. Different carriers have different strengths with regards to maximum coverage allowed, provisions, premiums, and more. I find Assumption Life’s Golden Protection to be very competitive with regards to pricing, age limit, and maximum coverage. The maximum age is particularly important for the elderly looking to achieve their estate planning goals, as some of the other carriers don’t offer coverage up to 85 years of age like Golden Protection does.
Jackelyn: The best no medical life insurance policies are from Canada Protection Plan, simply because they offer the most variety of any simplified issue insurance company. They have deferred options and better pricing for being able to say no to more medical questions. They offer term and permanent insurance: Term 10, 20, 100, and whole life with the option to pay up the policy in twenty years. Their minimum is also lower than a lot of companies at $5,000.
However, if you’re in good health, younger (under 50) and simply don’t want a medical exam, your best insurance company to apply to is Western Life. They offer up to $500,000 of coverage (under 40 and $250,000 up to 50) without a medical exam if your answers on their application as in good standing.
Craig: Canada Protection Plan is my choice because it ensures the client gets the best possible rate, and the best terms (i.e. potential for immediate coverage vs. 2 year or 3 year waiting period). Because it requires no medical and policies are issued quickly, it has the right combination of benefits.
Andrew: Assumption Life has a great permanent insurance product that is well-suited for final expenses, such as to pay funeral costs. With guaranteed level premiums that require no medical exam, the nice part about this product is that it has an accidental death benefit and a transportation benefit that are included at no extra cost. It also has a nice guaranteed cash value that can be withdrawn in future years.
William: Currently, Canada Protection Plan (CPP) has the best no medical life insurance policies. They provide larger coverage amounts and their price is more competitive. They also have more plans to choose from. Since they do a lot of marketing, more consumers are aware of their name.
Question two: In your opinion, what is the biggest mistake people make when buying no medical life insurance?
Tamara: It is if they apply for regular insurance knowing they have a medical problem. If they get declined, rated or postponed then there is a problem with applying for no medical insurance. There is a question on the no medical application that asks: “Have you been declined rated or postponed for insurance in the past two years?” Because the answer to that is yes, they will be stuck with a two-year conditional term. If the person purchased the no medical plan first, there would be no such condition on the plan.
Brian: The biggest mistake people make when buying no medical life insurance is confirming they really have to resort to it. If they can qualify for a traditional policy – even if rated heavily – they should be able to save compared to an equivalent no medical policy. If they must have no medical life insurance, they should always shop around for the most suitable features and lowest cost. This is where a qualified broker can help.
Jackelyn: The biggest mistake, and I hope this doesn’t come across biased, is not buying no medical life insurance through a broker. There are so many products out there and many have limitations. There’s no way a consumer can know the differences and know what policy is the best fit for them. By using an agent, you’ll ensure you get the best value no medical policy for your needs.
Craig: People with health issues that apply for regular coverage should also get one of these policies in force before undergoing medical underwriting to avoid being deferred (two-year waits) if declined or offered insurance with a regular carrier. This is like insuring the insurance application.
Andrew: The biggest people make when buying nonmedical life insurance is to apply for permanent insurance first through the regular standard market. The reason being is that if you get declined in the regular standard market then full coverage of the no medical life insurance may not be able to be available to you from day one. Working with a life insurance expert for no medical life insurance is important before embarking on getting the best coverage at a fair price.
William: Many providers of no medical life insurance do marketing/advertising targeting directly at consumers, i.e., asking consumers to buy direct from them. Consumers who buy no medical life insurance direct from the providers are making a serious mistake. As a consumer, they should have a choice. When they go direct, the staff of the provider who, are not licensed life insurance professionals, would also sell the no medical insurance as a commodity. Consumers have no idea that there are many options out there. For example, they may qualify for traditional life insurance which cost less and is better. The provider selling direct may not have the best plan to meet the consumers’ needs. Consumers should be fully aware of what options are available for them before making a purchase.
One thing it seems that of all our experts agree on is there is no one perfect no medical policy for everyone. Each company offers its own policies, some of which might suit clients better than others. So, if a person is looking for a quality no medical life insurance policy, their best bet is an independent broker who will be able to find them the right fit, instead of going straight through the insurance company itself. Thank you everyone for weighing in on this topic.