No medical exam life insurance

 

Life insurance is an important consideration to making sure your loved ones are taken care of financially. But what if you don’t qualify for a traditional policy due to health reasons? That’s where ‘no medical exam’ life insurance comes in. This type of policy does not require a medical exam, making it a good option for those with pre-existing health conditions.

‘No medical’ policies are a simplified and fast way to secure life insurance. They have a shorter qualification process compared to traditional life insurance and only require a short medical questionnaire to qualify.

Since the insurance companies issue ‘no medical’ policies without intensive underwriting and without a medical examination, they take on a higher risk. Premiums for these policies tend to be higher and coverage amounts are lower than for fully underwritten policies.

However, ‘no medical’ life insurance policies have their pros and cons, so it’s important to weigh your options carefully before deciding if this is the right type of coverage for you.

What is no medical life insurance?

A ‘no medical’ life insurance policy is a type of life insurance that does not require you to go through the hassle of a medical exam. ‘No medical’ plans usually only require that you take a short health questionnaire. The application process is usually limited to a phone interview to collect basic health information.

The insurance company uses this information to determine the risk factor, based on which they will decide the type of life insurance for which you will be approved, the premiums you will pay and coverage amount for which you will be insured.

If you qualify and are approved, you can get your insurance policy coverage in a matter of days as opposed to weeks, which is typically the case with traditional life insurance.

How does ‘no medical’ life insurance work?

When you apply for a ‘no medical’ policy, the agent will conduct a phone interview and ask some basic medical questions about your health condition. The answers you provide will determine if you qualify. You will be advised on how much coverage is available and at what rates. Ideally, you should be working with an independent agent who has access to multiple insurers in Canada so you are not limited to just the offerings of one life insurance company. This will give you the opportunity to have access to the best rates and coverages available.

Different types of ‘no medical’ life insurance

There are three primary types of ‘no medical’ life insurance.

Guaranteed Issue Plans

A guaranteed issue life insurance policy is a type of life insurance that does not require the policy owner to undergo a medical examination or answer a health questionnaire in order to be approved. With this type of policy, you’re guaranteed to be approved for coverage, regardless of your health status or pre-existing medical conditions. Guaranteed issue life insurance policies are usually small whole-life policies.

Death benefits range from about $2,000 to $25,000. This type of policy is typically used as a funeral expense insurance plan to cover final expenses.

Guaranteed issue policies are also often more expensive than other types of life insurance due to the increased risk that the insurer takes on by not requiring a medical exam. Premiums tend to be significantly higher and they include a waiting period – typically two years – before benefits are available.

Simplified Issue Plans

The application process for simplified issue plans is simplified – hence the name – and only requires the applicant to answer a health questionnaire. Applying for these policies is relatively simple and fast. However, due to the abbreviated application process, not all applications are approved if your answers to the health questionnaire determine that you are a high-risk person.

Approval for simplified policies is not guaranteed, and the death benefit is usually capped at $500,000 or less. It is important to note that these policies may also have a waiting period, usually two years, before the death benefit is available.

‘No medical’ simplified issue plans are available in both term and permanent options. Permanent simplified issue plans offer lifetime protection but, unlike fully underwritten permanent life policies, these plans do not accumulate cash value and offer limited coverage.

Simplified issue life insurance is a good choice for those in good health that may not otherwise qualify for a traditional term or permanent life insurance policy.

Term life insurance Vs. Simplified term life insurance

Term life insurance can be bought as simplified term life insurance. The difference is the application, the medical exam, and the premiums.

Standard term life policies have a longer application and health questionnaire. You may also have to submit to a medical exam if the health questions indicate a need for further review of your health.

Simplified issue term life insurance policies, however, have a shorter application process and may not require any medical exam to be submitted. The simplified application process is considered a higher-risk policy for the insurance company, and they will adjust the monthly premiums to reflect the higher risk.

What is the difference between guaranteed issue and simplified issue life policies?

With simplified issue policies, you apply for life insurance and, based on the application questions alone, you may or may not be approved for coverage.

Guaranteed issue policies are guaranteed to be approved for coverage if you meet some basic criteria, usually age.

Guaranteed life insurance policies will cap the death benefit at $25,000. These policies also grade the death benefit, which means the beneficiary will not receive the full benefit within the first few years of the policy being in force.
There is no medical exam required for either type of insurance plan.

What is underwriting in life insurance?

Underwriting is the process of assessing the risk you present when you apply for insurance. The amount of risk affects the amount of insurance coverage you’re eligible for and how much you pay for your premiums each month. The amount of the death benefit and the cost of insurance is determined once the underwriting process has been completed.

Underwriting for life insurance applicants is done in two ways: fully underwritten or accelerated (or simplified) underwriting.

A fully underwritten life insurance policy goes through a more rigorous process, which involves taking a medical exam to determine if the applicant is qualified for insurance. This may be a result of the applicant having health conditions that are a risk for insurance. If the application is fully underwritten, there may not be any exclusions to coverage.
Accelerated underwriting, on the other hand, is a faster and simplified qualification process. This is usually available to healthy applicants with no serious health issues that may disqualify them for a policy.

Accelerated or simplified underwriting also means a shorter application process and health questionnaire and usually no medical exam. A downside of accelerated underwriting is the policy exclusions. If the applicant should die from any of the diseases that are listed on the policy, there will be no death benefit paid.

How much do ‘no medical’ life insurance policies cost?

No medical life insurance has a higher cost than traditional life insurance policies. Life insurance based on limited underwriting and no physical medical exam is considered to be a higher risk and charged accordingly.

Age (in years)	Smoker	Non-smoker
50	$93.89	$63.70
55	$114.75	$80.24
60	$147.76	$101.36
65	$189.94	$129.10
70	$266.17	$182.74
75	$372.44	$275.90

The above table shows approximate premiums for a female seeking $20,000 in guaranteed life insurance coverage.

Age (in years)	Smoker	Non-smoker
50	$135.77	$79.76
55	$170.53	$101.39
60	$215.69	$135.92
65	$310.50	$192.15
70	$376.51	$250.90
75	$478.49	$355.90

The above table shows approximate premiums for a male seeking $20,000 in guaranteed life insurance coverage.

Who should consider buying a ‘no medical’ life insurance policy?

There are many reasons why someone might choose to purchase a policy without undergoing a medical exam, including the convenience and speed of being able to get coverage without having to go through a lengthy underwriting process. There are some examples of situations when ‘no medical’ life insurance becomes especially important.

• People with pre-existing health conditions that make it difficult to get traditional life insurance. If you have a pre-existing medical condition, for example, most insurers will exclude it automatically. But if you’ve been fully recovered from your condition for a certain number of years, you may still be able to get coverage. This is to ensure that you’re not a high-risk applicant and that your condition is well under control.
• People who don’t want to go through the hassle or expense of getting a medical exam.
• People who want coverage that is effective immediately, without having to wait for approval from a medical underwriter.

A’ no medical’ life insurance policy can be a great option for younger audiences who may not be able to qualify for a traditional life insurance policy due to health reasons. If you have been declined for life insurance in the past, a ‘no medical’ policy may be your best option.

Older age groups can also fill their life insurance needs with a non-medical guaranteed acceptance life insurance plan.

What are the pros and cons of a ‘no medical’ life insurance policy?

Before you decide whether a ‘no medical’ life insurance policy is right for you, it’s important to understand the pros and cons.

Pros

No medical exam required: There is no physical exam. A short health questionnaire is usually all that is needed. If you don’t like needles and probes, ‘no medical’ policies will take away the anxiety of having to submit to physical exams.

Faster approval process: You can get your insurance policy in just a few days compared to traditional life insurance since there is little medical underwriting that needs to be done.

Ideal for people with health conditions: People with pre-existing health conditions are seen as high risk level and often have trouble getting traditional life insurance coverage. You are more likely to get approved for insurance coverage.

Cons

Premiums for no medical plans are higher: Insurance companies take a higher risk on these policies and they charge accordingly.

The caps on coverage are much lower on ‘no medical’ plans: Guaranteed issue plans usually max at $25,000 and simplified issue plans cap at $500,000. Standard term policies, on the other hand, can go up to $5,000,000 when fully underwritten.

Healthy applicants with low-risk factors for occupation and lifestyle may pay more for coverage than necessary. If you are in this category, you are better off with a standard term life policy.

Which companies offer the best ‘no medical’ life insurance policy?

Simplified life insurance is a relatively young product, and yet there are quite a few life insurance providers offering it. Some of the top-rated life insurance companies in Canada are Canada Protection Plan, Sun Life, RBC, SSQ Insurance, and Manulife.

Frequently Asked Questions

Can I get life a life insurance policy without a medical exam?
Yes, many people can qualify for medical life insurance policies, even if they have been denied life insurance coverage before.

How much life insurance can I get without a medical exam?
How much coverage you will get will depend on your individual needs and circumstances. You may be pleasantly surprised at the wide number of choices and coverage amounts offered for no medical life insurance.

One option is to get what’s known as ‘guaranteed issue’ life insurance. This type of policy doesn’t require a medical exam, but it does have some limitations. Coverage is typically very limited – usually only around $25,000. Because there’s no medical exam, insurers often charge higher premiums for this type of policy.

Another option is to get what’s known as ‘simplified issue’ life insurance. This type of policy also doesn’t require a medical exam, but it offers more coverage than a guaranteed issue policy – typically up to $500,000. And while premiums may be slightly higher than for traditional policies, they’re still generally much lower than for guaranteed issue policies.

Finally, if you’re healthy and don’t mind going through a medical exam, you can get what’s
known as ‘traditional’ life insurance. This type of policy offers the most coverage – typically up to $10 million – and usually has the lowest premiums. Of course, the tradeoff is that you’ll have to go through a medical exam in order to qualify.

Do insurance companies check your medical records?
A life insurance provider can access your medical record to see if there is a serious health condition that would be an uninsurable risk for them. However, a life insurance company may only access your medical history if you give written permission for them to do so.

Can you get no medical life insurance if you have health problems?
Pre-existing health conditions are not always a deal-killer. You may still be able to qualify for permanent life insurance. Insurance companies can issue policies with exclusions and deferral periods for pre-existing conditions. Deferred plans offer full coverage after two years, and 50% coverage if death occurs in the second year due to non-accidental means. But if death occurs in the first year, all premiums are returned in addition to around 3% simple interest.

Can you be denied a no medical life insurance policy?
A life insurance company can deny life insurance coverage under some circumstances. Part of the application process is answering questions about your health condition. If your health history reveals information that the insurance company considers too high a risk, you will not be approved for insurance.

Conclusion

Insurance policies not requiring medical underwriting are a great way for those with good health to get an insurance policy. Different policies and carriers determine how much coverage they will offer based on their criteria.

Even though ‘no medical exam’ policies do not require you to submit to a physical exam or full medical underwriting, they still assess the risk of each application. The insurer’s assessment of risk will determine the coverage amount they will offer and at what cost.