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No-Medical Exam Life Insurance Pros & Cons

Let’s face it. No one likes going to the doctor. It’s no wonder why people search for no-medical exam life insurance when shopping around for a policy. 

In some instances, like if you have certain pre-existing health conditions, a no-medical exam policy can help you get coverage you might not otherwise be eligible for. But before you go that route, you should know that there are several reasons why a medical exam might be worth it when it comes to purchasing life insurance.

In this article, we’ll discuss the pros and cons of no-medical exam life insurance to help you find the right policy for your budget and health status. Plus, find out exactly what a life insurance medical exam entails and what you can do to prepare for the best outcome.

HOW NO-MEDICAL EXAM LIFE INSURANCE POLICIES WORK

When shopping for life insurance, the first thing you need to decide is what type of coverage is best for you and your family and how much coverage you need. Life insurance generally falls into two categories—term and permanent—and within each category you’ll find no-medical exam options. But if you opt for a policy that doesn’t require a physical exam, the amount of coverage you qualify for may be less and your premiums higher.

Your insurance company wants to know how risky you are to insure, and a medical exam provides them with a wealth of information to assess that risk. When your insurer has a clear picture of your current health and family health history, they can more accurately price your policy and are willing to offer you more coverage. However, without a medical exam, your insurer has to make their best guess as to how healthy you are and how to price your policy. Coverage amounts tend to be lower and prices likely higher to protect the insurance company.

GUARANTEED ISSUE VS. SIMPLIFIED ISSUE

When it comes to no-medical exam policies, insurers primarily offer two options: guaranteed issue and simplified issue. The primary difference between the two is how much health information you’re willing to disclose.

Guaranteed Issue

Guaranteed issue life insurance policies don’t require a medical exam and won’t ask any detailed questions about your health as part of the application process. You only have to answer a few general questions about your health and medical history. 

Guaranteed issue life insurance can be term or permanent, but coverage is often capped at $25,000—often only enough to pay for a funeral and final expenses. And if you pass away within the first few years of owning the policy, your insurer may only be liable to pay a percentage of the death benefit. 

Guaranteed issue policies tend to be best for people who can’t find coverage any other way. Premiums are high compared to the policy’s face value and they won’t do much in the way of generational wealth or leaving a legacy for your heirs. That said, many employers offer guaranteed issue term policies as a free benefit for employees. It usually isn’t portable (you can’t take coverage with you when you retire, if you change jobs, or your employment is terminated) and usually doesn’t provide sufficient coverage to be your sole source of life insurance, but any amount of insurance you can get for free should be taken advantage of. 

Simplified Issue

For better rates and higher coverage, simplified issue life insurance is a better option if you’re willing to answer a detailed health questionnaire. You won’t need a medical exam, but your health questionnaire provides your insurer with a good amount of information with which they can calculate the risk of insuring you. You’ll answer questions about your health as well as providing a detailed family health history.

Simplified issue policies can be term or permanent. Coverage amounts range from $25,000 up to a few hundred thousand, depending on your insurer. 

Simplified issue policies tend to be best for people who have health conditions that are well controlled or who need immediate coverage without waiting for medical underwriting. Many people choose simplified issue policies because they are convenient, but you could save a lot of money and leave a larger legacy to your loved ones if you’re willing to undergo a 30-minute physical. 

PROS & CONS OF NO-MEDICAL EXAM LIFE INSURANCE

Here are the pros and cons of opting for a guaranteed or simplified issue no-medical exam life insurance policy. 

Pros

  • Convenient
  • Provides immediate coverage
  • Covers pre-existing conditions
  • Provides sufficient death benefit for final expenses

Cons

  • Lower coverage amounts
  • Higher premiums
  • Death benefit may not be sufficient for income replacement
  • Fewer options for customizing your policy to fit your goals

HOW HEALTH AFFECTS LIFE INSURANCE RATINGS

After your insurer reviews your life insurance application, regardless of whether or not it includes a medical exam, health questionnaire, or is a guaranteed issue policy, they will assign you a rating which factors into how much your insurance premium will be. For most insurance companies, life insurance ratings are as follows:

Preferred Plus: Excellent health and/or no family history of health issues

Preferred: Very good health and/or family history may show minor health issues

Standard Plus: Good health and/or family history may have some health issues

Standard: Average health and/or family history may have several health issues

Substandard: Poor health and/or family history has serious health issues 

If you’re in good health and/or have a clean bill of health in your family history, it makes sense to seek out a policy that requires a medical exam, as you’ll likely get a better insurance rating and more affordable premium. 

WHAT HAPPENS DURING A LIFE INSURANCE MEDICAL EXAM?

If you opt for a traditional term or permanent life insurance policy that requires a medical exam, what exactly does it entail? Here’s what to expect:

First, you’ll schedule your appointment with a paramedical. This can usually be done through your insurance agent. At Paradigm Life, our Customer Experience team can help get you scheduled through our preferred paramedical ExamOne. Your insurance company pays for your exam; it doesn’t cost you anything.

Your medical technician will come to you for your exam. You can choose to have it done in your home, your office, or other location that’s convenient for you. You do not have to go to a doctor’s office.

During your exam, your medical technician will ask you detailed questions about your health and family health history, including any recent visits to the doctor and any prescription medications or supplements you may be taking. They will also complete the following:

  • Check your weight and height to calculate your body mass index (BMI)
  • Draw a blood sample and request a urine sample
  • Check your pulse and blood pressure
  • Perform an EKG or other indicated tests (generally reserved for applicants requesting high coverage amount or over the age of 50)

Your insurer requests these items to learn more about your cardiovascular health, including cholesterol and risk for heart disease or stroke, to find out whether or not you are diabetic or pre-diabetic, to determine whether or not you are overweight or obese, and to test for diseases like hepatitis and HIV/AIDS. 

Your medical exam only takes about 30 minutes.

Once your paramedical has your results, they are submitted to your insurance company as part of the underwriting process. You will get a copy of your results.

LIFE INSURANCE MEDICAL EXAM TIPS

To get the best results from your medical exam and qualify for favorable insurance rates, consider the following tips:

Several months before your exam:

  • Quit smoking. Your insurance company factors in nicotine and tobacco use up to 36 months prior to your application and recent use will show up in your blood work.
  • Lose weight. If you’re overweight or your BMI is less than ideal, dropping a few pounds can help you get a better insurance rating, as obesity is considered a major indicator of future health issues and insurability.
  • Drive safe. Your insurance company may look at your driving records to determine your risk of an auto accident.

In the weeks leading up to your exam:

  • Cut back on caffeine and alcohol, especially leading up to your exam. They can skew your blood pressure and heart rate.
  • Gather your medical history, including vaccination records. If you’ve experienced any serious medical conditions or undergone medical procedures, documentation showing a clean bill of health from your doctor can improve your chances of getting a favorable insurance rating.
  • Gather your family medical history.
  • Compile a list of your medical contacts like doctors or physical therapists, including phone numbers and addresses.

The day before your exam:

  • Skip your workout. Intense exercise, especially cardio, can cause changes in blood pressure and urine samples that could skew your test results.

The day of your exam:

  • Skip breakfast. Accurate blood sugar results typically require abstaining from food for 6-8 hours before a blood draw.
  • Drink water. Staying hydrated helps flush your system and makes it easier for your medical technician to draw blood.

No-medical exam life insurance might be right for you if you have pre-existing health conditions that would otherwise prevent you from being insured or cause your premiums to skyrocket. However, if you’re young and in good health it’s often worth 30 minutes of your time to take a medical exam. It can significantly improve your insurance rating, help you lock in favorable premiums for life, and increase your coverage. To learn more about insurance options and customize a policy that fits your financial goals, schedule a complimentary consultation with a Paradigm Life Wealth Strategist today.

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