Medical exams are a common practice in the life insurance application process. While most policies require a medical exam, that’s not the case for all life insurance policies. If you decide to get a policy without a medical exam, there are some benefits and drawbacks depending on your situation.
Why Do Life Insurance Policies Tend to Require Medical Exams?
When life insurance companies issue policies, they want to ensure they can dispense tens of thousands (or even hundreds of thousands) of dollars while remaining profitable. Insurers rely on premium payments to stay afloat and want to ensure that the individual purchasing the policy will live long enough to pay premiums consistently over several years. This is why life expectancy directly impacts premium rates.
Medical exams give insurers an accurate idea of how long an individual can be expected to live, which translates to the amount of time they’ll be able to pay premiums. Insurers can use medical exam results to detect inconsistencies between how an individual answered questions on an application and what the screenings indicate.
What Types Of Policies Don’t Require Medical Exams?
Simplified issue and guaranteed issue policies don’t require a medical exam. These typically have higher premiums relative to their death benefits since insurers cannot assess risk as accurately without a medical exam. Applications for these policies are often more detailed than those with medical exams.
The difference between simplified issue and guaranteed issue policies lies in the medical underwriting process. Simplified issue policies have medical underwriting, but it solely consists of a medical questionnaire. Guaranteed issue policies have no medical underwriting at all.
Who Should Get a Policy Without a Medical Exam?
Older individuals in poor health may benefit more from applying for a policy without a medical exam. This type of individual would be more likely to be denied a policy following a medical exam. On the other hand, a young and healthy individual may choose a simplified issue or guaranteed issue for efficiency.
Simplified issue is ideal for someone in relatively good health. The premiums will be lower, and the death benefit will be higher compared to what an individual can get through guaranteed issue. Guaranteed issue is better for those who are unlikely to qualify for policies with medical underwriting or want to get a policy as quickly as possible. The downside is that there may be a waiting period of up to three years, where beneficiaries won’t be able to get the full death benefit if the policyholder dies during that time.
Get Your Policy Today
At All Things Insurance, we can help you get the affordable life insurance policy you deserve without undergoing a medical exam. We offer various options so that you can find the policy that’s the perfect fit for your needs and preferences. Call us today at (763) 645-5450 to learn more.