Traditionally, applying for life insurance coverage involves submitting to a medical exam. This exam is similar to an annual physical: An examiner measures your height, weight, and blood pressure and takes blood and urine samples for analysis.
However, you may be hesitant to take a medical exam. Perhaps you’re worried about uncovering a serious medical issue, or perhaps you want to avoid spending extra time at the doctor’s office in general. Fortunately, insurance companies offer various policies that don’t require an exam or, in some cases, any medical information at all. Learn how life insurance with no medical exam works and when to consider this option.
Why Do Life Insurance Companies Use Medical Underwriting Anyway?
Medical underwriting is a key part of the application process for most life insurance policies. Insurers rely on it when deciding which applicants to accept or decline and what premiums to charge. Due to medical underwriting, people with health issues like pre-existing conditions could face higher premiums or be ineligible for coverage.
Insurers use medical underwriting to determine the risk of an applicant passing away while the policy they’re applying for is active. So if, for example, a person applies for a 30-year term life policy, the insurer needs to estimate the risk of the applicant passing away during the next 30 years.
To make informed underwriting decisions, insurers collect medical information from applicants. This typically involves a detailed health questionnaire and physical exam. Insurers use medical exams to collect accurate, up-to-date health information and identify health risks the applicant may not be aware of, such as undiagnosed diabetes or high blood pressure.
How No-Exam Life Insurance Works
No-exam life insurance policies allow applicants to skip the traditional medical underwriting process. Instead of requiring applicants to take a medical exam, insurers ask for limited health information, or for some policies, no health information at all.
The amount of medical underwriting required for a life insurance policy without a medical exam varies based on the insurer and type of policy. In some cases, applicants must fill out a short (3-12 questions) health questionnaire. In others, insurers don’t ask for any health information and guarantee acceptance to all eligible applicants.
Advantages of Getting a Life Insurance Policy Without a Medical Exam
Buying life insurance without underwriting or medical question requirements has many potential advantages. Some reasons consumers seek out these policies include:
- Higher approval rates: Insurers may accept the majority of applications for life insurance with no medical exam or guarantee approval for some types of policies. This helps people with high-risk medical issues qualify for life insurance.
- Easier application process: No-exam policies don’t require applicants to fill out lengthy health questionnaires or schedule a medical exam, making them appealing to shoppers who value simplicity and convenience.
- Accelerated decision timeline: Traditional life insurance underwriting takes around 4 to 8 weeks, but skipping the medical exam allows insurers to make coverage decisions within a week or even the same day.
- Greater privacy: With some life insurance, no medical questions or exams are needed. This appeals to consumers who prefer not to share any information about their medical history.
Disadvantages of No-Exam Policies
While there are many reasons to consider a life insurance policy without medical exam requirements, there are also several potential downsides of these policies. Some significant disadvantages include:
- Higher premium rates: Offering life insurance without a medical exam leaves insurers with less information about applicants’ health. To compensate for this higher risk, they charge higher premiums.
- Limited coverage amounts: Insurers typically cap no-exam coverage limits at around $5,000 to $100,000, depending on the policy type. In contrast, the maximum coverage amounts for traditional policies could be more than $1 million.
- Delayed coverage: No-exam policies often have a 2-year waiting period before the coverage takes effect. If policyholders pass away during this period, their beneficiaries receive a return of premiums paid rather than the death benefit.
- Limited rider options: Riders are add-ons that policyholders can buy to customize their life insurance coverage. While options vary from insurer to insurer, many offer few or no riders for no-exam policies.
What Kinds of Life Insurance Do Not Need a Medical Exam?
People who want life insurance without underwriting have a few options to consider. Many employees have access to no-exam coverage through their jobs, and if not, individual policies like guaranteed issue life insurance, final expense life insurance, and simplified issue life insurance could be an option.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is a type of whole-life policy that promises acceptance to all eligible applicants, regardless of their health issues. These life insurance policies typically have low death benefits, such as $5,000 to $25,000.
These policies are marketed toward older adults who aren’t eligible for traditional life insurance. The premiums tend to be much higher than other types of life insurance because the applicants are assumed to have high-risk medical issues.
Who Should Consider This?
These policies could be a good option for people ineligible for other coverage due to a serious health issue, such as dementia or kidney failure. Insurers typically set a minimum age of 50 to apply, but there are other policies for younger adults to consider.
Simplified Issue Life Insurance
Simplified issue is a type of underwriting insurers use for both term and whole-life policies. As life insurance with no medical exam, coverage is typically limited to $100,000 or less, though some insurers offer policies with face values as high as $500,000.
Consumers must answer a short list of health questions instead of taking a medical exam. Approval isn’t guaranteed, but overall, insurers accept around 70% to 90% of applicants. They charge higher premiums to account for the risk of making approval decisions with limited health information.
Who Should Consider This?
Simplified issue life insurance is designed for consumers who don’t mind paying a higher premium in exchange for a streamlined application process. It may also appeal to people with health issues who worry they won’t pass traditional underwriting.
Final Expense Life Insurance
Final expense life insurance, also known as burial insurance, is a small whole-life policy designed to cover end-of-life expenses, such as funeral and probate costs. Insurers typically offer coverage amounts ranging from $5,000 to $25,000.
Since final expense life insurance provides a small death benefit, insurers offer this coverage without needing a medical exam. Applicants may be required to answer health questions. Like guaranteed issue life insurance, insurers often set a minimum application age of 50.
Who Should Consider This?
Burial insurance may be a good option for older adults who are making end-of-life plans and want to leave their loved ones’ money for funeral costs. In 2021, the average cost of a funeral with a viewing and burial was $7,848.
Group Life Insurance
Employer-sponsored group life insurance provides a base amount of coverage to eligible employees without the need for a medical exam. Coverage is typically limited to a specific dollar value or a multiple of the employee’s salary.
Group life insurance doesn’t require a medical exam because insurers underwrite the group as a whole. That means they consider overall group characteristics, such as average age, rather than looking at any individual employee’s medical history.
Who Should Consider This?
Insurers typically pay for some or all of the premiums for basic coverage, so it’s a low or no-cost option for the 60% of American workers with access to job-based life insurance. It’s especially appealing for people with health issues that make them ineligible for coverage outside of work.
How Much Does Life Insurance With No Medical Questions Cost?
The cost of life insurance with no medical exam varies based on the type of policy, as well as an applicant’s age, gender, and chosen coverage amount. Talk to a trusted agent for advice about premium rates.
Still, average costs can be helpful when weighing life insurance options. Here’s what a 55-year-old man might pay for the coverage options discussed in this guide:
- Group life insurance: No or low cost, depending on the employer
- Guaranteed issue life insurance: $110 to $200 per month for a whole life policy with $25,000 in coverage
- Final expense life insurance: $30 to $65 per month for a policy with $10,000 in coverage
- Simplified issue life insurance: $35 to $55 per month for a 20-year term policy with $100,000 in coverage
Is This Type of Policy Right for You?
Life insurance with no medical exam is a specialized type of life insurance that may be a good choice for some applicants but a poor choice for others. It’s a good idea to talk to a trusted agent for help deciding if a no-exam policy suits your needs.
In general, no-exam policies may be a good choice for the following applicants:
- People who feel their age or health disqualifies them from traditional life insurance
- People who want a small death benefit for end-of-life expenses
- People who don’t mind paying higher premiums to avoid taking an exam
On the other hand, the following applicants may be better served by a traditional policy with a medical exam:
- People in good or excellent health who may be eligible for lower premium rates
- People who need a large death benefit for income replacement
- People who want access to a wide variety of policy riders
Consider Standard Term Life Insurance Coverage
If the cost of insurance without a medical exam is concerning for you, it may be worth considering term life coverage. Term life insurance lasts for a predetermined number of years or a “term.” Short-term policies cover policyholders for a year or less, and longer terms of five, 10, 20, or even 30 years are available. Term coverage typically costs much less than permanent coverage, and a medical exam may not be necessary.
With standard-term life insurance policies, consumers can typically access higher death benefits at much lower premiums than would be available through permanent policies. These policies can be surprisingly affordable, even for people with health issues who are hesitant to take a medical exam. For example, a 55-year-old man in poor health could pay around $65 to $110 per month for a 10-year $250,000 policy.
Standard-term coverage doesn’t necessarily require a medical exam. Increasingly, insurers are using accelerated underwriting. Here’s how it works: Applicants complete a detailed health questionnaire, and insurers supplement this information with publicly available non-medical data, from driving records to criminal records. The exam requirement is waived if the insurer has enough information to decide.