Let’s NOT Get Physical: Everything you need to know about no-exam life insurance
Last time we talked about the importance of your life insurance application and the role it can later play in rescission or cancellation of your policy when a claim is presented for payment (Post-Claim Underwriting: Can Insurance Companies Cancel Your Policy After You’ve Already Made a Claim?). We talked about how the application process includes both a written questionnaire/health history and an in-person physical examination. What if you already know you have high risk factors and won’t fare well on a physical? Is it possible to get life insurance without taking a physical? Sure enough, the market does provide no-exam policies. These policies cost more and may not be beneficial as a long-term investment or to pay off a sizable mortgage, but if you are looking for a minimal policy that will cover final costs, you might find a no-exam policy that is right for you. Learn more about no-exam policies below. If you are a beneficiary who presented a claim for benefits, but the insurance company denied your claim or rescinded the policy, contact a seasoned insurance law attorney for advice.
How do no-exam life insurance applications work?
It’s possible to get a life insurance policy without taking a physical exam, but whether you should or not is another question. Also known as Guaranteed Issue, Guaranteed Acceptance, or Simplified Issue, no-exam policies are often marketed to older people with medical issues who know they needn’t bother applying for an exam-based policy. No-exam policies are generally low-face value term life policies. It is possible to purchase higher coverage – as much as $500,000 –but you should expect to pay a higher premium than exam-based policies.
Some no-exam policies will have stricter underwriting guidelines, meaning the application process is open to a smaller pool of people. For example, these guidelines may include:
- The policy is limited to persons aged 65 or lower, or 60 or lower
- Limits on weight relative to height
- Persons with certain conditions may be automatically excluded, including people with cancer, heart disease, a history of stroke, alcohol/drug abuse, COPD and others (some exam-based policies may exclude people for these reasons as well);
- Exclusions for people who smoke, have HIV/AIDS, are terminally ill, or are currently in the hospital or long-term care
Who should apply for a no-exam policy?
A physical exam is a standard part of the life insurance application process. It determines whether the insurance company will accept you or not, and also how much your insurance will cost, depending upon what health/risk category you fall into based on the results. Opting for a no-exam policy simply because you don’t like taking physicals, are scared of doctors, or feel it would be too inconvenient, are not reasons to forgo the physical in favor of a no-exam policy. Often, the exam itself is not a full physical and is conducted by a nurse who travels to your site to take your vitals and conduct an interview.
No-exam policies should probably be limited to people with special circumstances that would keep them from being accepted through a traditional policy process. These circumstances could include:
- You have high risk factors regarding your health
- You are healthy but have a risky hobby
- You have a chronic condition, such as diabetes
- You are in a great hurry to get a policy
- You aren’t looking to get much out of a life insurance policy; you just need enough to cover final expenses
An application for life insurance relies in part on a questionnaire, with self-reported information on personal and family medical history. This information is relied on even more heavily in the case of a no-exam policy. If you recently had a medical exam and can provide the results to the underwriters in place of a new exam, you might be better off utilizing the standard application process.
