A report released earlier this month detailed how many American consumers do not get quotations for life insurance because they are afraid that they will probably fail the medical exam which is usually required by insurance providers before a policy will be issued.
However, these individuals were unaware that there are actually several types of insurance policies which do not require a medical examination.
- Simplified Life Insurance – This involves the policyholder providing their medical history via the application form and not having to submit to medical examination.
- Graded Benefit Life – In this policy, no questions are asked regarding the health of the applicant and no medical examination is required. However, these policies are generally difficult to purchase and are designed only for those of late middle age or older.
- Guaranteed Issue Life – No health history or medical examination is required for this type of policy and no applicant can be turned down. It is because of this that this insurance can also be known as Guaranteed Acceptance.
When a typical insurance policy is purchased, the application process can take anything up to six weeks before a policy will be issued to the applicant. However, for no exam policies, the process is much shorter and can often be completed same day. This is one of the reasons why these policies are now becoming much more popular.
In addition to the time factor, they also allow greater opportunity for those individuals who have health problems and those who are a little older to purchase life insurance.
Life insurance policy premiums are generally calculated based on the life expectancy of the applicant. Lower rates are applied to young people in good health. A medical examination is used to help insurance providers to determine the general life expectancy of the applicant.
However, with no exam policies, the insurance provider has a much great level of risk when they issue an insurance policy and so they will sell policies at much higher premiums. That is why if you are in good health it is well worth the extra hassle of a medical examination to ensure a cheaper price for your life insurance.
No exam life insurance is seen as a quick and convenient method of obtaining life insurance, but consumers should not expect it to be cheapest. However, if you are in ill health then it may be a case of expensive cover being better than no cover. In this case no exam cover could offer the perfect solution.