No Exam Life Insurance Basics

Updated on November 23, 2020

What is No Exam Life Insurance?

Meta description: There are 2 main types of no exam life insurance: guaranteed issue and simplified issue. But which one is right for you? Find out here. 

If you’ve been hearing about no exam life insurance but don’t exactly understand what it is, you’ve come to the right place. No exam life insurance is life insurance that you can get without having to have a medical exam. This is the main way it differs from fully underwritten life insurance. 

Want to learn more about no exam life insurance? Read on to find out the different types available, how much they cost, and who they’re best for.

Types of No Exam Life Insurance

Just as there are different types of fully underwritten life insurance policies, there are different types of no exam life insurance. Guaranteed issue and simplified issue are the two main types, and even though they both allow you to skip the medical exam, they are as different as night and day. Read on to find out more about each. 

Guaranteed Issue No Exam Life Insurance

Guaranteed issue life insurance is the easiest no exam life insurance to get. In fact, it’s called “guaranteed issue” because acceptance is guaranteed to anyone under the age of 80. Guaranteed issue is a type of whole life insurance, which means there is no expiration date. To apply for this type of life insurance, you just need to fill out your name, gender, and other basic information. No health questions are asked, there is no underwriting involved, and approval is instant.

The downside of guaranteed issue is that most policies come with a graded death benefit. This means that the full death benefit will only be paid out if the policyholder dies at least two years after he’s purchased the policy. If he dies within two years of purchase, the beneficiaries only get a refund of the premiums plus interest. 

Other characteristics of a guaranteed issue policy are:

  • Coverage only goes up to $25,000
  • High monthly premiums

For these reasons, guaranteed issue is often considered a last resort and is usually purchased by people who can’t qualify for any other type of coverage. In many cases, guaranteed issue

policies are used to cover final expenses like funeral and burial costs, which can range between $7000 and $12,000. 

Simplified Issue No Exam Life Insurance

Simplified issue is another type of no exam life insurance, but these types of policies are partially underwritten and they are harder to qualify for. Simplified issue policies are usually term policies, which mean you can purchase them for a certain time period — 5, 10, 15, 20 years, etc. Once the term is over, so is your coverage (though some policies come with the option to renew.)

Unlike guaranteed issue, the application for simplified issue does include some health and lifestyle questions, but certainly not as many as a traditional life insurance policy has. Insurers want to make sure that you don’t pose too much of a health risk to the company. 

Underwriters review the information you provide and come up with a quote. The monthly premiums are usually higher than those of fully underwritten life insurance policies since there is no medical exam and the insurer knows less about you. While not everyone can qualify, people who don’t have any major health issues should be able to get approved. Coverage can go up to $500,000, and in some cases, up to $1 million, both fairly large amounts for a no exam policy.

Benefits of No Exam Life Insurance

In the case of guaranteed issue life insurance, the benefits are clear. These types of policies provide coverage to people who otherwise wouldn’t be able to get anything. Simplified issue, however, is a bit trickier, since not everyone can qualify and premiums tend to be slightly higher than those of a fully underwritten policy.

So why do people choose simplified issue?

The answer lies in the many benefits of a no exam policy. No exam policies have become more popular over the years due to many reasons:

  • Convenience – Nothing beats the convenience of not having to undergo a life insurance medical exam.
  • Speed – It can take up to 2 months to be approved for a fully underwritten policy, whereas it can take a few days or a few weeks at the most to get approved for simplified issue.
  • Fear of needles – People who are scared of needles often push off getting life insurance because of the blood test that’s included in the medical exam. No exam insurance allows them to get coverage without having to confront their fear. 

If you’re not sure whether getting no exam life insurance is the right move for you, it’s best to consult with a trusted insurance advisor who can offer guidance for your personal situation.

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