With life insurance, both you and your insurance provider are taking a calculated risk. So it’s no surprise that most life insurance carriers won’t ink an agreement without more information about your health. Traditionally, life insurance policies have required a medical exam—a visit to the doctor, lab work, and potentially extensive paperwork—as part of the underwriting process. While this is one path to obtaining coverage, it’s not your only option.
Some insurance companies don’t require a medical exam for certain types of life insurance. But an insurer that issues coverage without evaluating your health and lifestyle takes on additional risk. For this reason, premium rates are often higher for no-exam policies relative to policies that require an exam.
Let’s take a look at what no-exam life insurance is, the coverage options available, who it's best suited for, and its pros and cons.
What Is No-Medical-Exam Life Insurance?
A medical exam is often part of the life insurance underwriting process, which is how an insurance carrier determines your eligibility for coverage and your rate. It typically includes drawing blood and urine samples, measuring your height and weight, and performing a blood pressure screening.
However, not all insurers conduct a medical exam. Instead, they may require you to answer lifestyle and medical history questions during the application. They then set your premium rate based on your responses and the rest of your application.
An insurance provider may decide not to sell you a life insurance policy if it considers you a high risk due to your health or lifestyle.
Types of Life Insurance With No Medical Exam
The thoroughness of the underwriting process varies. Not only will some insurers allow you to skip the exam, but some ask fewer medical questions than others—or none at all. Full underwriting involves filling out a comprehensive application, requiring you to answer a series of medical and nonmedical questions in addition to a medical exam.
Policies issued using accelerated underwriting involve a similar level of scrutiny minus the exam. Simplified and guaranteed issue policies don’t require as much scrutiny, making them easier to qualify for.
Whether you’re concerned about a blood test or just want to skip the lab work, there are several options for no-medical-exam life insurance.
Policies that require the most thorough underwriting typically have the best available rates.
The life insurance application process carries unknowns, but with a guaranteed issue policy, you can be fairly certain that your application will be approved—as long as you meet the age requirement—often that you’re at least 50 years old. Life insurance companies will not refuse guaranteed-issue coverage based on your medical history and you won’t need to answer any health questions or take a medical exam.
But because insurers don’t ask about your health (and therefore expect applicants to have health conditions), your coverage will be limited and expensive relative to other policies. For starters, the death benefit is often capped at $25,000—if you need more coverage, you’ll need to apply for a different type of policy. Plus, most insurers use a graded death benefit to reduce their risk on these types of policies, and it’s important to understand how that works.
A graded death benefit reduces the death benefit your beneficiaries would receive during the early years you own the policy.
For example, if you die from a natural cause during the first two years your policy is in effect, the death benefit paid might be 120% of the premiums paid. In other words, instead of the face amount of your policy, your beneficiaries would receive the premiums you paid plus an additional 20%.
Death due to all causes receive the full benefit once a two- to three-year waiting period elapses, depending on the policy.
People with chronic medical conditions like cancer may be good candidates for guaranteed issue policies since it may be difficult for them to qualify for other life insurance policies.
Similar to a guaranteed issue life insurance policy, a simplified issue policy has no medical exam. However, you still need to answer some health questions.
Simplified issue life insurance has no graded benefit but may cap the death benefit at $250,000 or less, for example. A simplified issue policy may be a good option if you’re looking to skip the medical underwriting process and need a modest amount of life insurance coverage quickly.
An accelerated underwriting process forgoes the conventional medical exam and supplements your application with an extensive medical questionnaire and data from external sources. Besides the information you provide on the application, data may come from motor vehicle records, credit reports, the Medical Information Bureau, and health records, including a prescription drug check. Insurers analyze this data to assess an applicant’s risk.
If the data available is insufficient to adequately assess your risk, you may need to answer additional questions and/or complete an exam.
Who Should Choose No-Exam Insurance?
No-exam life insurance may be suitable for a range of applicants, including older adults who want coverage for final expenses and applicants in good health who prefer to skip a medical exam. That said, it’s important to know which type of coverage you’re applying for. For example, someone in good health should generally not apply for a guaranteed issue policy. This is because they could probably get a much better rate by undergoing a more extensive underwriting process through an option like accelerated underwriting.
How To Find a No-Exam Policy
There are multiple carriers that sell no-medical-exam life insurance, but make sure you know which type of underwriting is used before applying. For example, if you have a medical condition that would otherwise make qualifying for coverage difficult, simplified issue and guaranteed issue life policies may be good options.
Eyeing a high coverage limit? Your only choice is probably a policy that uses accelerated underwriting, but you may not have the option to skip a medical exam. Fully medically underwritten policies provide higher coverage limits than guarantee or simplified issue.
You should never use no-exam insurance as a way of not disclosing a known health condition to secure coverage. Your insurer may void your policy if you provide incomplete or misrepresent medical information on your application.
Pros and Cons of No-Medical-Exam Life Insurance
There are several pros and cons to factor in when considering a no-exam life insurance policy.
Potentially steeper premiums
Lower coverage limits
May have graded death benefit
The main pros of a no-exam life insurance policy are:
- Convenience: The entire process is simpler if you’re seeking life insurance coverage without a physical, and you can complete the application without leaving your home.
- Quick approval: Insurance providers aren’t waiting for the underwriter’s feedback or your lab results, so you could be approved for coverage almost immediately.
Although companies will issue coverage without conducting a follow-up medical exam, there are still some pitfalls to watch out for with no-exam life insurance:
- Potentially steeper premiums: If your insurer has little information about your medical background, they’ll compensate for the added risk with higher premiums.
- Lower coverage limits: Compared to traditional life insurance policies, no-medical-exam policies typically carry lower coverage limits.
- May have a graded death benefit: A guaranteed issue policy doesn’t pay your beneficiaries the full death benefit until a policy has been in force for a certain period of time, such as two years. If death occurs before that time, the insurance company may only return the premiums you paid plus an amount such as 20%.
After weighing the pros and cons of no-medical-exam coverage, you should also consider the pros and cons of medically underwritten coverage before making your decision.
- A medical exam is often, but not always, part of the life insurance underwriting process.
- Guaranteed issue life insurance may be the answer for older adults who are in poor health and want coverage for final expenses.
- Simplified issue policies ask a few health questions but don’t require a medical exam.
- Accelerated underwriting uses the most thorough process of no-exam policies; relative to other no-exam policies, available premiums are the lowest and coverage limits are the highest.
- No-exam life insurance policies carry higher premiums and lower coverage limits than their medically underwritten counterparts.