Considering purchasing a life insurance policy? Most insurance companies tend to require a medical exam as part of the underwriting process. If you don’t want to undergo a medical examination, there is an alternative – the no-exam life insurance policy. But this option will cost you.
Here are five things to know.
The reason insurance companies ask for medical exams is to determine the premiums you’ll pay based on your health profile. These exams typically involve measuring various health indicators, such as height, weight, blood pressure, and even blood and urine tests, CNN reported. If the results show you’re in good health, you’ll usually enjoy lower premiums, as the insurance company views you as a lower risk. Opting out of the medical exam leads insurance companies to assume a higher level of risk. Consequently, the companies tend to set higher premium rates for no-exam policies.
No-exam life insurance might be a suitable option for different individuals, such as people with health Conditions. People with pre-existing medical conditions that might disqualify them from traditional policies can benefit from no-exam insurance. Others might choose no-exam insurance is they are worried about the confidentiality of their medical history.
Maybe you have high blood pressure or cholesterol,” Michael Giusti, senior writer and analyst at Insurancequotes.com, told CNBC. “You might have some reason you don’t want to talk about it, so you’re willing to pay that higher rate.”
No-exam insurance can be faster and more convenient. In some cases, young people with no health issues who want fast coverage might be good candidates for this. The same holds true for seniors who might have medical conditions and might not receive the standard type of life insurance.
On the con side is the higher premiums that come with these policies. Also, the coverage might be limited.
“They’re going to go ahead and assume the worst, they’re going to assume that you want to hold some information back from them,” said Giusti. “They’re going to price the policy higher.”
There are various types of no-exam life insurance, such as group life insurance. This type is often offered by employers and coverage tends to be small amounts based on your salary. You can pay for additional coverage. However, it may end if you leave your job. There’s also simplified issue life insurance. With this type of insurance instead of a medical exam, you’ll need to answer health-related questions to qualify. Another is guaranteed issue life insurance, which provide a limited amount of coverage. And, accelerated underwriting life insurance, which uses third-party data, like prescription medication history and driving records, in lieu of a medical exam.
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