When you apply for life insurance coverage, the insurance company is going to look at dozens of different factors when they are deciding how much to charge you for coverage or if they will accept your application. They are going to look at everything from you smoking habits to your habits.
One of the biggest factors that they are going to review is your health. If you have severe health complications or you’re in bad health, then there is a chance that you’ll be declined for life insurance. When you apply, the insurance company is going to require that you take a medical exam, and the results of that test are going to play a significant role in how much you pay or if you’ll be declined.
There are plenty of people that choose policies that don’t require an exam because they are scared of needles, they don’t think they will qualify for a traditional plan, or they need life insurance fast. Regardless of the reason, there are several affordable options for life insurance protection without the medical exam.
No Exam Policy
The first type is “traditional” no exam policy. As you can guess from the name, these plans are life insurance policies without the health tests. The insurance company is still going to ask you dozens of questions about your health and pull your medical records, pharmaceutical records, and driving records, but they won’t require that you undergo the physical health tests. There are several notable disadvantages to these policies that you should take note of when you’re shopping for insurance protection.
The most significant pitfall of these policies is that they are going to be more expensive than a policy that requires a medical exam. The purpose of the health tests is to give the insurance company an idea of how much risk you are to accept for insurance coverage. Without that test, the insurance company is taking a great risk to give you insurance company, they are going to offset that by charging you higher premiums.
The other drawback of these plans is that you’re going to be limited to how much coverage that you can buy without taking the medical exam. Most insurance companies will only sell you around $250,000 worth of protection, which isn’t enough coverage for most families. Not having enough life insurance is one of the worst mistakes that you can make for your loved ones.
Burial Insurance
Burial insurance policies (often called final expense or funeral insurance) were designed for older applicants that want to have a plan that will give their loved ones the money that they need to pay off any funeral expenses without leaving them with financial strain. A typically funeral can cost around $10,000, which can be difficult for a grieving family to cover.
Because these plans are small, there is no medical exam required, and the insurance company is not going to ask any health questions before they accept your application. You can be approved for one of these plans in a matter of hours. Funeral insurance plans range in face value amount depending on the company, but they are typically no larger than $25,000.
Graded Benefit Plan
A graded benefit plan is similar to a typical no exam plan, except that the company is not having to ask any health questions and there is a waiting period on the plan. For the first two years after you buy the policy, if you were to pass away, your family wouldn’t receive the face value of the plan. Instead, they would only get a return of your premiums. With some companies, for the first year, they will pay out 50% of the face value, and for the second year, they will pay around 70% – 80%. After the first two years have gone by, the plan will return to a normal policy.
If you have a pre-existing condition, these policies are an excellent way to still get insurance coverage without having to pay a fortune every month. Even if you were to pass away within the first two years, your family would still receive money, it just won’t be the full face value of the plan.
Life Insurance Without The Exam
Regardless of which type of life insurance plan that you choose or why you want to skip the exam, it’s vital that your family has the insurance protection that they need. Nobody wants to think about any tragic happening to them, but it’s important that you plan for the worst. Don’t wait another day to get the insurance coverage that your family deserves.
Financial professional and online entrepreneur, I'm best known as The Financial Blogger. I want to make money because I like enjoying life the way it should be; with a lot of great food and wine! I also love to spend time with my lovely wife and 3 kids!
