There are many situations when people start thinking about life insurance, such as at birth of a child, protection of newly purchased assets (e.g. house), etc. However, the search for life insurance (market research, getting a quote, buying a policy) for some people is more complicated. There are situations when life insurance companies prefer not to take the risk and opt to reject your life insurance application.
Are you at risk of being declined and if so, what can you do about it? Fortunately, there are other insurance products, outside of traditionally underwritten policies, that you can buy. In particular, no medical life insurance has lower acceptance barriers and simplified quoting; those who do not qualify for standard life insurance can still get no medical life insurance.
Below we will discuss which particular situations are best for no medical life insurance, but first let’s take a closer look at this product first.
No Medical Life Insurance: How Does It Work
As the chart below shows, there are two aspects involved in getting a life insurance policy: a medical exam and completion of a medical questionnaire.
|Insurance Type||Medical Exam / Tests||Medical Questionnaire|
|Standard Life Insurance||Yes||Yes|
|No Medical, Simplified Issue Life Insurance||No||Yes|
|No Medical, Guaranteed Issue Life Insurance||No||No|
There are also three types of life insurance you can theoretically get:
1. Standard Life insurance: You are required to undergo a medical exam, be weighed, have your blood pressure tested, etc. You will also complete an extensive medical questionnaire. All that will be rewarded with relatively low insurance rates (premium) that are based on your health, age, smoking status, and the length/type of policy you choose. All these criteria are considered when assessing your insurance rates (also called underwriting). An online life insurance quote can give you though an initial idea of your insurance premiums.
2. No Medical, Simplified Issue Life Insurance: This product comes without a medical exam but you are still required to complete a medical questionnaire (though typically shorter than the one for standard life insurance). The amount of coverage you can get will not exceed $300,000 and this insurance will cost you more than the standard policy. Some policies can also come with a waiting period of 1 or 2 years. A no medical simplified life insurance quote is quite easy to get.
3. No Medical, Guaranteed Issue Life Insurance: This product comes without a medical exam and there are no medical questions to answer. You can get a maximum of $25,000 coverage. You have probably heard advertising for this type of insurance in numerous TV ads – “Get a quote and apply today, you are always pre-approved and can not be turned down”. However, it comes at a price. Guaranteed issue life insurance is always more expensive than getting the same coverage amount through standard or simplified policy, and it is important to note that guaranteed issue life insurance has a 2-year waiting period. That means if you die within two years of buying the policy, your claim will not be paid. This restriction is in place to prevent terminally ill patients from buying an insurance policy and having their beneficiaries submit a claim before sufficient premiums have been collected. Similarly to Simplified Issue Life Insurance, getting a quote for Guaranteed Issue Life Insurance is very straight-forward.
When Would You Choose No Medical Life Insurance?
There are several situations when people look into No Medical Life Insurance – we will highlight five main reasons and share some recommendations:
Situation 1: Your current health and fitness state prevents you from getting a standard life insurance policy
Your health is subjected to an in-depth assessment by an insurer. If you are seriously overweighed and have additional health problems, such as high blood pressure, an insurer might decline you for a standard policy. In order to assess your weight, insurers use the BMI index (body mass index). Your gender, age and smoking status are also factors.
Situation 2: You have a serious health pre-condition
There are numerous medical pre-conditions that insurers consider to be risky, such as cancer, HIV, some types of diabetes, Multiple Sclerosis (MS) and many other serious diseases. Find out more about quotes for life insurance with medical pre-conditions.
Situation 3: Your age does not allow you to apply for a standard policy
Many life insurance policies are designed for people who are younger than a particular age. Once you reach this age (often 75), you cannot apply for a traditional life insurance policy. That’s where No Medical Life Insurance can help. The Seniors Life Insurance policy can provide money for final expenses or funeral, among other last financial needs.
Situation 4: You do not want a medical exam
Some people prefer paying higher premiums as a trade of for skipping a medical exam. No Medical Life Insurance is much simpler and not having a medical exam has its price, but it can still be an attractive option for some people. For answering a few simple medical questions instead of getting a medical exam, you can get your policy faster and easier. You just have to pay a little more for it.
Situation 5: You want to get a quick, small amount of coverage without any hassles
No Medical Life Insurance is sometimes a preferred option for seniors when they think about funeral or final expenses, and they want to make sure that this burden does not fall on the shoulders of their loved ones. Coverage amounts required in this case are often lower ($10,000 – $25,000) and thus, no medical life insurance can be a fast solution. Though it is more expensive, it helps to get life insurance in place quickly, without worrying about medical exams. The truth is, as we age, most of us have some health issues and navigating through them to get an insurance policy is not always easy.
No Medical Life insurance – Summary
Though no medical life insurance is not an insurance product for everybody, there are situations where it offers the perfect solution, especially for those that are difficult to insure (e.g. those with a history of cancer, HIV, heart disease or history of hear attacks, Obesity, Depressions etc.) or those that hate medical exams. We suggest talking to a broker who has experience in dealing with issues similar to yours to help you to navigate through the two different types of no medical insurance policies.
Remember four rules when dealing with a brokers:
1. Make sure that he/she deals with at least 15-20 insurance companies to be able to provide you with a true market perspective and useful comparisons.2. Ensure that broker is interested in understanding and resolving your situation as opposed to simply selling you the most expensive policy (tip: if a broker asks many relevant questions about your situation and health, it means he or she is trying to assess your particular situation).
3. Make sure your broker clearly explains to you all the details and exclusions e.g. the 2-year waiting period that we discussed earlier.
4. And, of course, make sure that you are comfortable working with this broker and there is a trusting relationship between you both.
Should you have any questions about no medical life insurance, or simply want to discuss your situation with an experienced broker who is knowledgeable about life insurance for different medical pre-conditions or life insurance for seniors, you can do it here – our services are free and carry no obligation.