Life insurance is one of the most important safety nets that you can ever purchase for your loved ones. It’s the best way to ensure that your loved ones have all of the money that they need, regardless of what happens to you. When you apply for life insurance coverage, there are dozens of different factors that the insurance company is going to look at before they accept your application.
For many applicants, obtaining life insurance is a matter of completing an application for coverage, going through the medical exam, and then waiting for the approval. Unfortunately, though, for those who are not in the best of health, it is oftentimes not that simple.
But even if you’ve been turned down for life insurance coverage in the past, the good news is that if you have an adverse health condition, you may still be able to qualify for the protection that you need through a no medical exam life insurance policy.
How No Medical Life Insurance Works
No medical exam life insurance works in a similar manner to regular life insurance coverage in that in return for a premium payment; a death benefit amount is paid out to a named beneficiary.
The difference, however, on these types of policies comes primarily in how the applicant is approved for the coverage during the application process. For example, with a no exam life insurance policy, the person who is applying for the coverage will not be required to undergo the paramedical examination that is needed for most of the traditionally underwritten life insurance plans.
Likewise, there is also no need for the submission of blood and urine samples – and, because there are no medical underwriting requirements, the application process can be much faster, and policies are approved much quicker, than most traditional forms of coverage. In some instances, a policy may even be approved within just a few days after the application has been submitted – or possibly even sooner.
No Medical Exam Insurance Coverage
The coverage on a no medical exam life insurance policy can be either term or permanent. This means that the policy can provide death benefit only coverage (term), or a both a death benefit, along with a cash value component (permanent).
With a term insurance policy, an individual may purchase coverage that lasts for a set amount of time, such as five years, ten years, 15 years, 20 years, or 30 years. They may also opt for one-year renewable term life insurance coverage. Once the period of time has expired, however, the insured will need to either re-apply or convert over to a permanent life insurance policy (if applicable) if he or she wishes to remain covered.
With a permanent life insurance policy, the coverage will not expire within any set amount of years, but rather will last throughout the lifetime of the insured – provided that the premium is paid. The amount of the premium will typically be guaranteed not to increase – regardless of the age or the health condition of the insured.
A permanent policy will also include a cash value component that builds up a tax-deferred amount of savings. This means that there will be no taxes due on the amount of the gain in the savings component unless or until the funds are withdrawn. This can allow the money to grow and compound exponentially throughout the years.
This money can be borrowed or withdrawn by the policyholder for any reason that he or she sees fit – including paying off debt, supplementing his or her retirement income, or even for taking a nice vacation.
Different Types Of No Exam Life Insurance Policies
There are several different types of no exam life insurance policies that are available in the marketplace today – so it is important to understand which one it is that you are purchasing. This is because the way in which the death benefit is paid out can differ dramatically, depending on the kind of plan you have – and it will be essential that your beneficiary knows how this could affect the amount of benefit that they could receive. There may also be differences in the way the plans are applied for, as well as in the underwriting or policy approval process.
No medical exam life insurance plans are a great option for anyone that has several pre-existing conditions or is in poor health. There are several advantages and disadvantages to these plans that you should be aware of when you’re looking to get life insurance protection.
The best advantage is that anyone can buy one of these plans, regardless of age or health. It’s important that everyone has the protection that they need. With a no medical exam, your health won’t prevent you from giving your family life insurance protection.
Another advantage is how quickly you can be approved for coverage. Because you don’t have to wait for the company to review the results of the exam, you can get life insurance protection in a matter of days. With a traditional plan, you could wait up to a month to get life insurance. If you’re looking to get life insurance as quickly as possible a no medical exam is going to be the best option.
With every kind of policy is going to have disadvantages. With a no medical exam, the most notable pitfall is that these plans are more expensive than a traditional plan. The purpose of the medical exam is to give the insurance company an idea of how much of a risk you are to insure, but without that exam, the insurance company is taking a much great risk. The company is going to offset that risk by charging you higher monthly premiums for your coverage.
Another disadvantage to these plans is that you’re going to be limit on the amount of insurance coverage that you can get. With a no medical exam, most insurance companies are only going to allow you to buy around $250,000 of life insurance. If you need any more than that, you’ll need to apply for a traditional plan or purchase two no medical exams.
As you can see, there are a lot of different factors that you’ll need to consider when you’re thinking of purchasing a no medical exam policy. Because these policies are going to be more expensive, you should look to purchase a traditional plan that requires a medical exam. They are going to help save you hundreds of dollars on your coverage.
Before you apply for any life insurance plan, you’ll need to calculate what your life insurance needs are. Aside from getting the right kind of policy, it’s vital that you give your family enough coverage in case something were to happen to you. If you find that you don’t need a massive amount of life insurance, a burial insurance plan could be a better option.
Burial insurance is a type of life insurance that is typically obtained for paying off a person’s funeral costs and other final expenses when they pass away. These policies have face amounts that range from $5,000 to approximately $30,000. There are, however, some insurance carriers that may offer more coverage. In most cases, burial insurance for seniors or final expense insurance is purchased by those who are between the ages of 50 and 80.
While some burial insurance policies will pay out the full amount of the stated death benefit, others pay out what are known as graded death benefits. Here, for instance, if the insured dies within the first year of owning the policy, the beneficiary may only receive 25% of the total amount of the stated benefit. If the insured dies in the second year, the beneficiary will receive 50% of the total. If the insured dies in the third year, the beneficiary will receive 75% of the total. And, if the insured lives to the fourth year or beyond, the beneficiary would receive 100% of the stated amount of the policy’s death benefit upon his or her passing.
Guaranteed Issue Life Insurance
A guaranteed issue life insurance policy is, as its name implies, guaranteed to offer coverage for those who apply. These policies have no health questions on the application for coverage for the applicant to answer. Therefore, provided that the premium continues to be paid, these policies are not only guaranteed to be approved, but they will also continue to stay in force.
It is important to be aware, however, that oftentimes with a guaranteed life insurance policy, the insurance company knows that they are taking on more risky applicants with this coverage. Therefore, in order to compensate for some of this risk, the full amount of death benefit may not be available to the beneficiary if the insured dies within the first two or three years of policy ownership.
Instead, should the insured pass away during this time period, the named beneficiary will receive back only the amount of premium that has been paid into the policy. If, however, the insured lives past the second or third year and then passes away, the full amount of the policy’s death benefit will be available to the beneficiary.
Simplified Issue Life Insurance
With a simplified issue life insurance policy, the plan can usually be both approved and issued within just a few days or weeks of application. This compares to many weeks – or even months – that one may need to wait after applying for a traditional, medically underwritten life insurance policy.
While there are some health-related questions that are asked on the application for coverage for this type of policy, the questions are typically quite basic. Some examples can include the following:
- Are you a smoker?
- Do you currently reside in a long-term care facility or a skilled nursing home?
- Have you been diagnosed with HIV / AIDS related complex?
Because there is no medical exam, the premium that is charged on these types of life insurance policies is typically higher than those that are medically underwritten. However, in some cases, this may be the only option that is available for obtaining the life insurance protection that a person needs.
Calculating Your Life Insurance Needs
Before you apply for any type of plan, you’ll need to determine what your life insurance needs are and how much coverage your loved ones will need if you were to pass away. Several different factors are going to go into your life insurance amount.
The first number that you should crunch is your debts and any final expenses that would be left behind to your loved ones. Your life insurance plan should be large enough to give your family the money that they need to pay off any bills and fees that they would be responsible for if something tragic were to happen to you.
The next number that you should look at is your paycheck. The secondary purpose of your plan is to give your family the money that they need to replace your income, especially if you’re one of the main income earners in your house. If you were to pass away unexpectedly, your family could struggle to pay for any necessary expenses without your paycheck, but that’s where your life insurance comes in.
The Benefits Of A No Medical Exam Life Insurance Policy
There are many benefits to owning a no medical exam life insurance policy. Certainly, these plans can be much easier to qualify for than medically underwritten plans. They can also be approved much faster. Therefore, if an individual is in need of a policy and has nowhere else to turn, this can offer a viable protection option.
Because you never know what’s going to happen tomorrow, means that you shouldn’t wait any longer to get the life insurance protection that your family deserves. We know that finding the perfect life insurance plan can be a long and difficult process, but our agents are here to make it as quick and simple as possible. Our agents have years of experience helping clients connect with the perfect plan to meet their needs. They also can help you save hundreds of dollars on your plan.
If you have any questions about no medical exam life insurance or about burial insurance plans, please contact one of our agents today. We would be happy to answer those questions and ensure that you’re getting the lowest rates for your insurance plan.