No exam term life insurance is very similar to its traditional term counterpart — it’s life insurance that you buy for a certain period of time, only with the no exam version, you don’t have to undergo a medical exam as part of the application process. Term life insurance, for a standard policy or no exam policy, offers the greatest amount of coverage for the least amount of money.
No exam life insurance is NOT the same as accidental life insurance policies, which do not ask any health questions. The reason that no health information is required for accidental insurance is that the policy only pays out if you die in an accident — health is unrelated.
With no exam term life insurance, also known as simplified issue life insurance, some health questions are asked. This is because this type of life insurance provides coverage for the insured if they die from a health issue or accident. Since health issues are more common, insurers need to know some medical information about you if you want to purchase a no exam term life insurance policy.
During the term of your policy, your premiums do not change regardless of your lifestyle or health complications. Term policies are sold in 5-year increments, with common terms being 10, 15, 20, 25, and 30 years.
Term policies are usually purchased with the goal of reaching a certain milestone, like paying off a mortgage, sending the last kid to college, or retiring. In other cases, people purchase term policies in order to secure an SBA loan or fund a buy-sell agreement.
Traditional term policies require a free, in-home medical exam, but recently, no exam term policies have been becoming more popular. This is because people are busier than ever juggling multiple responsibilities, and adding even one thing like a medical exam to the list can prove overwhelming. Additionally, there are people who are afraid of needles and would do anything to avoid getting a blood test, which is included in the exam. For these people, no exam life insurance can be a savior.
What Is Required For No Exam Term Life Insurance?
In order to collect information about you, you’ll be asked to fill out a short questionnaire containing several questions about your health. Additionally, a phone interview will be conducted, and the insurance company will obtain and review your medical records, prescription history, and driving record. If approved, your only requirement is to keep up with the payment of your monthly premiums. Failure to pay can result in the life insurance company refusing to pay out the death benefit should it need to be claimed.
Why Purchase No Exam Term Life Insurance?
When no exam policies first came out, they were mainly purchased by people who needed quick approval for business loans or people who needed to finalize a divorce settlement. The majority of life insurance purchasers still preferred traditional term insurance because no exam has a higher cost. Previously, it cost as much as 30% more than a traditional policy, but today, that’s not the case.
In around 2016, many A+ rated life insurance companies started offering similar rates for no exam term and traditional term policies. When this happened, no exam policies suddenly became more desirable, not only because of the option to skip the exam but because approval comes in a matter of days, not weeks or months. If you’re interested in finding out how much a term no exam policy would cost you, you can get a free quote here.
General Guidelines for No Exam Term Coverage
Most no exam term policies come in terms of 10, 15, 20, 25, and 30 years. Coverage usually ranges from $100,000 to $500,000, though today there are some insurance carriers that offer up to $1 million. Most no exam term policies come with an age limit of 60.
When applying for no exam term life insurance, underwriters will review the following information:
- Prescription history
- Driving record from the Department of Motor Vehicles
- Medical Information Bureau (MIB) records
- Information from your phone interview
Due to the fact that your medical information is reviewed and these policies are underwritten, not everyone is granted approval for no exam term life insurance. However, if you’re in good health or have minor health issues, there is no reason you wouldn’t be approved.
The exact amount of your monthly premiums is determined by underwriters who assess the state of your health, as well as other factors like age, gender, smoker/non-smoker, occupation, and several more. The general rule of thumb is that the healthier you are, the less your monthly premiums will be. This is why people are encouraged to buy life insurance in their 20s or 30s, since those the years they are in the best state of health, and they will be able to lock in low rates for the entirety of their term.