Over the past few years, no exam life insurance has become a popular alternative to traditional life insurance. The reasons are clear: No exam life insurance offers coverage for loved ones and doesn’t require you to undergo a medical exam or answer detailed questions about your health. Therefore, getting approved is easier and quicker. In fact, the entire process can be done online.
However, because no exam life insurance is different than its traditional counterpart, there is a lot of misinformation floating around, mixed in with some facts and guesses so that consumers may not be completely clear about what these policies actually offer. The insurance experts at Sproutt have decided to set the record straight.
Here are 4 myths about no exam life insurance, debunked.
If you’re considering buying no exam life insurance, make sure to read this so that you can get fact separated from fiction.
Myth #1: No exam life insurance is only for people who are sick or unhealthy
It’s true that many people who have chronic or serious health conditions turn to no exam life insurance since, by its very nature, approval is easier. While certain no exam policies request some basic health details, they don’t dig as deep as traditional policies. Other no exam policies offer guaranteed coverage, which means anyone can get approved. Therefore, these types of policies can be a huge relief for someone who has been turned down for a traditional policy due to health conditions.
However, just because people who are not in great health can get approved easily does not mean that no exam is only meant for this demographic. People who are fit and healthy overall also choose no exam policies for several reasons:
- Approval is quick (days as opposed to weeks or months)
- The application process can be done entirely online
- Does not require a medical exam, perfect for people who are scared of needles or doctors
Due to the many benefits of no exam life insurance, it can be suitable for people in varying states of health.
Due to the many benefits of no exam life insurance, it can be suitable for people in varying states of health. Matt Schmidt of Diabetes Life Solutions states ” For some people with certain health conditions such as Diabetes, a non medical exam policy may actually be cheaper compared to fully underwritten life insurance products. No medical exam life insurance for diabetics is often quicker to obtain, and less expensive.”
Myth #2: Approval is guaranteed
There are two main types of no exam life insurance:
- Guaranteed Issue (GI)
- Simplified Issue (SI)
GI, as the name implies, means that approval is guaranteed, but SI doesn’t make this promise. While most applications are approved, there are some cases that are not. Given that everyone who applies for GI insurance is approved, the maximum coverage typically only goes up to $50,000 and the premiums are quite high. SI, on the other hand, offers coverage up to $1 million and the premiums are less than those of GI.
Myth #3: No exam life insurance is always more expensive than traditional
No exam life insurance has a reputation for being more expensive than traditional life insurance. Again, this is due to the nature of the policy. With traditional life insurance, underwriters assess an applicant’s health information and compare it against statistical figures. Statistically, people who are overweight or underweight, who smoke, drink alcohol, or have heart conditions, diabetes, high blood pressure, etc. pose a greater risk than those who are don’t.
With no exam policies, very minimal or no health information is provided, which means that underwriters have no way of assessing the risk someone poses to the company. Therefore, premiums tend to be higher.
Myth #4: You don’t need to provide any health information when applying for no exam insurance
When applying for GI, the only info you need to provide is your age and gender. No questions about your medical background are asked. When applying for SI, a few basic questions will be asked, such as:
- Are you a smoker?
- Do you have AIDS/HIV?
- Have you been declared terminally ill?
The type of policy you choose will dictate how much health information you need to disclose.
Shopping for life insurance can be an emotional experience, but it’s also one that necessitates a clear and logical head. First, you need to figure out how much coverage you need, how long you need it for, and what kind of policy can give you what you want. Once you sorted out your needs, you then need to go shopping. Just like you shop for the best toaster oven, vacuum, internet provider, etc., you need to shop around for the best life insurance carrier and policy. While doing your due diligence can take time and effort, the benefit of getting the best possible coverage is worth it. If you’d like professional assistance, you can turn to the expert insurance advisors at Sproutt for guidance.