With more and more life insurance companies offering their services over the internet with e-Applications and e-Signatures, it’s no wonder we’ve seen a rise in interest from individuals in the market for life insurance, to make their purchases online without the need for much intervention from a life insurance agent. Couple this with our increasingly connected and busy lives with our work and family, and it’s no wonder we’ve also seen an increase in interest for no medical exam life insurance purchases online. With the lack of need for a health exam to acquire coverage, and underwriting taking at times 15 minutes to a few days, those with busy or hectic lives can secure life insurance coverage with the click of a few buttons from the comfort of their couch. Despite the fact that this is a great option for many interested in life coverage we should understand some of the differences that come with owning such a plan over its more traditional counterparts.
- There Will Be Coverage Maximums
As a result of not needing to undergo a health exam to solidify coverage, these types of plans have coverage caps, which is understandable when you are asking a company to provide you life coverage without submitting yourself to a health exam to prove your level of insurability. With that said, depending on the company, coverage is maxed out at $399,000. If you have a need for more coverage than the maximum provided by that company you can either apply for multiple no exam policies or apply for a fully underwritten policy where a medical exam is required.
- Premiums Are Higher
It goes without saying that when you are buying a policy from an insurance company that doesn’t require you to take a health exam, that insurance company will be charging you extra to sell you such a plan that doesn’t involve a health exam. On the other hand, if you purchase a plan that is fully underwritten you are more likely to pay much less for that coverage.
- Absence of Conversion Options
Traditional life insurance policies, particularly term life, has a conversion option that allows you to convert a term policy into a permanent policy down the road. Typically these conversion options have to be executed prior to a specific conversion date or age. As a result of not having to take a health exam, no exam life insurance policies are known to not include the conversion option. Always make sure to ask your agent to verify whether or not the policy you are applying for or purchasing is eligible for conversion and what the conversion period is.
- Confirmation of Health is Still Required
Despite the fact that you won’t have to undergo a health examination, the life insurance company still needs to have a basic understanding of your general health before they can decide whether or not they are comfortable with the risk associated in affording you no exam coverage. Part of the application process for such a policy will still require that you answer some health related questions as well as have the insurance company review the MIB (Medical Information Bureau), your MVR (Motor Vehicle Report) as well as potentially request medical records from your doctor via an APS (Attending Physicians Statement). Different companies will look upon certain health conditions more favorably than others. Be sure to let your agent know of any health conditions you may have or had in the past so we can be sure to set you up with the best company for your particular situation.
- Know What You Are Buying
In the world of no health exam life insurance there is a need as a purchaser that you understand the type of policy you are buying. Some less than scrupulous agents have been known to offer accidental death benefit (ADB) policies as no medical exam coverage. Although ADB does not require an exam it also does not pay a death benefit to your beneficiaries unless you happen to die in an accident. In other words, if you die of natural causes, your family will not receive the life insurance settlement with an ADB policy. Always be sure of the type of policy you are purchasing and always ask questions.
- Work With a Life Insurance Broker
The best thing you can do for yourself, other than the decision to purchase life insurance (particularly income protection for your family), is to be sure you work with a life broker rather than a captive agent. Working with life insurance brokers, like our agents at Life Insurance United, means they’ll provide you access to over 60 life insurance companies when getting you quotes for coverage. Working with an agent who is a broker means you are more likely to find an insurance company who will provide you the best coverage for the least amount of premium. Now that you understand some of the differences of a no medical exam plan it will assist you making your decision as to the type of life coverage you want to apply for. To make sure you get the best rates on the coverage you need, be sure to request a quote from us here at Life Insurance United where we bring together all the life insurance companies to get you the best, most affordable rates possible.
Getting Enough Coverage
As we mentioned in the first point, these no medical exam policies have much lower coverage limits. For a lot of people, these policies wont’ give enough insurance payout. We mentioned earlier that you can either purchase another policy, or apply for a medically underwritten plan, but how do you know how much insurance coverage you did? There are several contributing factors to consider.
The first is how much debt would you leave behind for your family if you were to pass away? More than likely, you would leave your family with a mortgage payment, car payments, credit card bills, and much more. For a family that is going through the loss of a loved one, these debts can make the situation even more difficult. This is why life insurance is so important, it will give your family enough money to pay off all of your debts without struggling to get by.
The other factor that you need to consider when purchasing a policy is your annual salary and how many people rely on your income. If you have more people that rely on your income, they would experience serious financial loss if you were to pass away. One of the main purposes of a life insurance plan is to replace your income and give your family time to recover and find a way to permanently replace your salary.
Getting Lower Rates on No Exam Policies
Because no exam policies don’t require the medical underwriting, these plans are going to be more expensive, but there are a few ways that you can ensure that you’re getting lower rates. As we mentioned earlier, the best way to do that is through an independent insurance agent like ours at Life Insurance United, but there are a few others.
With most no exam policies, the insurance company is only going to ask questions about your age, your zip code, and if you’re a smoker/tobacco user. Well, you can’t change your age, and you probably don’t want to move just to get lower rates, but you can change your smoking or tobacco usage. Being listed as a smoker on your life insurance application is going to cause your rates to double, or even triple in some cases. If you want to get the lowest life insurance rates, one of the best ways is to kick the bad habit. Before you buy your no medical exam policy, drop the cigarettes. Your doctor and your wallet with both thank you.
If you really want to save money every month, it’s worth the trouble to get a medically underwritten policy. Purchasing a traditional term plan instead will keep hundreds of extra dollars in your pocket. Unless there is a specific reason that you’re choosing a no-exam policy, like health or time constraints, an underwritten policy is almost always a better option. Even if you are in poor health or have a pre-existing condition, we can find the best policy for you.
If you have any questions about no medical exam policies, term, whole, or any other questions about life insurance, we would be happy to answer those for you. It’s important that you get the best insurance policy to fit your family’s needs. Not having life insurance is one of the worst mistakes that you can make for your family, don’t leave them stranded under a file of debt if you were to pass away. Start the life insurance search today!