Life Insurance Policies With No Exam
Getting a health exam might be scary if you're afraid of needles or you think you won't qualify for a life insurance policy. Insurance companies routinely collect blood and urine samples to assess the risk of your death to the insurance company. Some insurers, however, have been able to devise a way to insure you without a medical exam.
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Type
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Life insurance that doesn't require an exam is called simplified issue or guaranteed issue. Simplified issue consists of a life insurance application with limited health questions. The company issues a policy as long as there are no major illnesses which would be terminal within 48 months. A guaranteed issue policy works similarly, except that full benefits aren't always payable at your death.
Significance
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Life insurance which is issued on a simplified basis allows you to buy insurance which pays a full death benefit. You'll need to have a relatively clean bill of health. In other words, you cannot have any major health issues. Guaranteed issue life insurance is offered when you otherwise would not be able to buy life insurance. This policy type is normally a graded-benefit whole life policy.
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Benefit
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Both simplified issue and guaranteed issue allow you to buy life insurance quickly. The nature of the process means that less time is spent examining your health and the insurer takes on an increased risk, but still issues a policy in short order. In the case of guaranteed issue, you get a policy when you otherwise would never get one.
Disadvantage
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Simplified and guaranteed issue policies cost more than fully underwritten policies. Both policy types charge higher premiums since there is no health exam involved with the policy. This means you overpay for insurance death benefit. With guaranteed policies, the premiums may be up to 10 times as much as a policy with a full medical exam. This may prevent you from buying all of the life insurance you need to protect your family.
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