Navigating the No Medical Life Insurance Marketplace

A recent LIMRA article stated that 75 percent of Canadians would struggle financially if their household’s primary breadwinner were to die. The truth is, this number is likely much higher than that. Aside from the emotional devastation, having a spouse die could be financially devastating for anyone without life insurance.

The LIMRA article also indicated “only 68 percent of Canadian households have any life insurance at all.” There are any number reasons for this including the fact that advanced age or a tarnished medical history can prevent applicants from qualifying for a traditional life insurance plan. However, over the years some insurance companies have moved to eliminate this problem by creating life insurance without a medical exam for higher risk applicants.For some the concept of a life insurance plan that does not require a medical exam is exactly what they need to hear. However, it is important for applicants to know that not all life insurance without a medical exam is created equally. No medical life insurance usually falls into three categories.

Guaranteed-Issue Life Insurance offers the best representation of life insurance without a medical exam. A guaranteed-issue plan requires no medical underwriting. This means no exam and no health questionnaire. Simply applying for the guaranteed- issue life insurance plan and meeting some basic criteria will ensure the applicants automatic acceptance.

Simplified-Issue Life Insurance is also considered to be life insurance without a medical exam. Although no medical exam is required for a simplified-issue plan, there is a brief health questionnaire that must be completed to qualify for this insurance.

Non-Medical Underwriting Life Insurance is the final product offered as life insurance without a medical exam. No medical exam is required for this type of no medical life insurance policy, but an extensive medical questionnaire must be successfully completed to qualify.

What it comes down to when applying for life insurance without a medical exam is the reason for the application. A perfectly healthy individual would not need to apply for this type of life insurance, but may consider doing so if he or she needed life insurance immediately. However, for an applicant that is experiencing a sense of urgency immediately after or during some kind of medical episode, a no medical life insurance policy may be the only have the option. Retirees are another group of people who may want to consider a no medical life insurance policy. Their advanced age and possibly questionable medical history can preclude them from successful getting a traditional life insurance plan for a reasonable premium.

There are several other things to take into consideration when thinking about applying for life insurance without a medical exam. It is important to note that the benefit amount of a no medical life insurance policy will often range between $5,000 and $50,000. This amount is considerably lower than the benefit that would be offered with a more traditional term life policy.

Premiums for any of the types of life insurance without a medical exam will likely be higher than for a traditional term life policy. This is because insurance companies make the basic assumption that applicants interested in a no medical life insurance plan bring with them a higher risk than an applicant willing to complete the medical requirements for a traditional life insurance plan. To offset this risk no medical life insurance plans may charge higher premiums.

Life insurance without a medical exam definitely has an important place in the marketplace. However, applicants should solicit advice from an accredited insurance broker before entering any life insurance market.

For more information, visit www.NoMedicalLifeInsurance.ca or call 1-866-899-4649.