No Exam Life Insurance Guide: Definitions, Use Cases, & Types of No Medical Exam Life Insurance
last updated on March 1, 2021The truth is, if you have loved ones who depend on you financially, odds are, you need life insurance.
Fortunately, there’s never been a better time to purchase life insurance, especially if you are interested in skipping the medical exam.
No exam life insurance is becoming very popular and many top life insurance companies are offering this type of life insurance. Carriers are expanding their no exam life insurance policy options while lowering premiums.
In this article, we will explain the different types of no exam life insurance policies, who should consider this type of policy, the benefit of riders, how to apply, and more.
Table Of Contents
- What is No Exam Life Insurance?
- Examples of Who Should Buy No Exam Life Insurance
- 4 Types of No Exam Life Insurance Policies
- No Exam Life Insurance for Smokers and Tobacco Users
- Pre-Existing Conditions and No Exam Life Insurance
- Seniors Have 5 No Exam Life Insurance Options
- How Much Life Insurance Coverage Should You Buy?
- 4 Drawbacks to No Exam Life Insurance
- How Does Life Insurance Fit into Your Financial Plans?
- How to Apply for No Exam Life Insurance
What is No Exam Life Insurance?
Simply put, no exam life insurance is life insurance issued without the medical examination of the applicant.
No exam life insurance (also known as non-med and no physical) is purchased all the time, and for good reason.
Here’s why:
- You skip the needles, nurses, and liquid samples.
- Often, your premiums (the amount you pay in exchange for life insurance) are competitive with medically underwritten life insurance.
- Application turnaround time can be instantaneous.
In fact, there’s never been a better time to purchase no exam life insurance. Carriers are realizing there’s a lot of us who have no interest in being poked with a needle.
Additionally, technology – via databases – provides pertinent information for applications. Database information is replacing medical examinations at an increasing rate.
Examples of Who Should Buy No Exam Life Insurance
While no exam life insurance can be an excellent fit for many, there are some specific circumstances in which it’s highly recommended:
1. You Need Life Insurance Right Now
Often, life insurance is needed in a hurry. No exam policies, in comparison to medically underwritten policies, can shave weeks off of the process of policy issuance.
Common situations in which life insurance is required quickly:
- SBA loans for small businesses
- Divorce settlement
- Court-ordered life insurance
- Peace of mind
2. Medical Environments Make You Cringe
Whitecoat syndrome, also called white coat hypertension, refers to a condition in which a patient’s fear – and consequently their blood pressure – spikes in a medical setting.
It’s common to loathe medical settings. You may experience:
- Intense fear of needles
- Discomfort around medical professionals (i.e. doctors, nurses)
- Elevated blood pressure
- General anxiety over medical procedures
In fact, for some, the idea of being poked with a needle has prevented them from making a life insurance purchase.
Fortunately, there’s never been a better time to purchase term life insurance with no exam. Your options have increased while the cost has decreased.
Note – baby life insurance is always issued without a medical exam.
3. You Have Some Minor Health Issues
Multiple minor health issues may preclude you from a Standard or better health rating if you participate in medical underwriting.
Here’s why: Often, if you take a couple of medications, or are being treated for a few minor health issues (i.e. high cholesterol, high blood pressure), your lab work might indicate concerns that you may be unaware of.
In other words, your lab work, should some red flags pop up, could place you in a Rated health class, meaning that you will have to pay a surcharge on your life insurance premiums of somewhere between 20 – 200%.
A Standard approval for no exam life insurance will, in all likelihood, cost you significantly less than a Rated approval for medically underwritten life insurance.
As an example, adult children often opt to buy no exam life insurance for parents to streamline the underwriting process and avoid labwork.
Remember, no exam life insurance uses less scrutiny during the underwriting process (how life insurance companies evaluate risk).
4. It has Been Over 2 Years Since Your Last Checkup
Life insurance underwriters want to see proactive care of your health. If you haven’t had a checkup in the last couple of years, there’s a possibility that something surprising could show up in your lab work.
Think: high cholesterol, elevated blood sugar, elevated liver enzymes or high triglycerides.
Keep in mind, honesty is always the best policy. Accurately answer all questions asked during the interview.
Bottom Line: Life insurance with no exam is an excellent fit for many, especially if you can’t stand needles, have a few health conditions, have not seen your doctor recently, or need coverage in a hurry.
4 Types of No Exam Life Insurance Policies
There are four primary types of no exam life insurance:
1. Simplified Issue Life Insurance
When you hear the term, “no exam term life insurance”, simplified issue is likely what’s being discussed.
As the name implies, simplified issue life insurance means the underwriting process is simplified – you get to skip the medical examination.
Today, this type of life insurance is sold more often than ever before.
Here’s why: Life insurance carriers realize many of us have no interest in being poked with a needle. Carriers would like your business and have, as a result, expanded coverage amounts and lowered premiums.
What you need to know about simplified issue life insurance:
- Often, premium rates are competitive with medically underwritten policies
- Best for those in at least average health
- Excellent health will grant you the lowest rates
- Maximum policy issuance age: 80
- Maximum policy face amount: $2,000,000 (limited availability)
- Policy issuance timeline: immediately or up to a few weeks
- Depending on the carrier, your age and health – medical records (called Attending Physicians Statement) might be ordered
- Some companies use Accelerated Underwriting – meaning that it’s possible you could be asked to participate in a medical exam, if necessary
- Collaborate with your independent agent to communicate whether or not you would be okay with a medical exam
2. Graded Benefit Life Insurance
Graded benefit life insurance is often your next stop if you don’t qualify for traditional life insurance (stricter underwriting).
A key detail about graded benefit life insurance is that the death benefit is not entirely available until, typically, 2 – 3 years after your policy is issued.
In other words, should you pass away during the first or second year of your policy, your beneficiaries can expect to receive a percentage of the death benefit:
- Year 1 = 25%
- Year 2 = 50%
- Year 3 = 100%
After year three, you can expect 100% of the death benefit to be paid. Keep in mind the benefit payment structure is an example and carriers differ.
Expect to be asked a few questions during the application process. We’re talking about a lenient health questionnaire with basic knockout questions, like:
- Have you been diagnosed with a terminal illness?
- Have you been diagnosed with HIV or AIDS?
- Do you reside in a hospital, nursing home, or receive hospice care?
What you need to know about graded benefit life insurance:
- Premiums are more expensive than simplified issue policies
- Best for those in less than average health
- Few health questions asked
- Death benefit is graded for the first 2 years
- Maximum policy issuance age: 85
- Maximum policy face amount: $50,000 life insurance policy
- Policy issuance: fast
Graded benefit life insurance is typically an excellent option for someone who has been declined for traditional life insurance. Most can qualify for graded benefit.
While $50,000 may not be an ideal coverage amount for a family, some life insurance is better than zero life insurance.
3. Guaranteed Issue Life Insurance
Guaranteed issue (GI) life insurance (like what AIG Life Insurance Company offers) is best for those who are, and we mean this in the nicest way, uninsurable. If you have exhausted all other life insurance options, you will want to consider GI.
Think of guaranteed issue as life insurance with no health questions asked.
Keep in mind that the death benefits will not typically pay out until 2 years after the policy has been issued.
That is to say, should you die during the first 2 years of the policy, your beneficiaries will not receive payment.
What you need to know about guaranteed issue life insurance:
- Premiums are more expensive than simplified issue policies
- Premiums are typically more expensive than graded benefit policies
- Best for those in poor health
- Zero health questions are asked
- Death benefit has a 2 year waiting period
- Maximum policy issuance age: typically 80
- Maximum policy face amount: typically $25,000 (sometimes $40,000)
- Policy issuance: immediately
Guaranteed issue life insurance should be considered your last resort for coverage.
For example, if you are terminally ill or are a current cancer patient, guaranteed issue likely makes sense.
4. Final Expense Life Insurance
Aptly named, final expense (FE) life insurance works best for those looking to cover costs associated with end-of-life needs.
Final expense policies typically do not have a waiting period, meaning that full coverage starts immediately.
What you need to know about final expense life insurance:
- Policy amounts are modest and are designed to cover funeral and end-of-life expenses
- Considered a form of no exam whole life insurance
- Best for those in at least average health
- Some health questions are asked
- Maximum policy issuance age: 89
- Maximum policy face amount: typically $50,000 ($100,000 in a couple of instances)
- Policy issuance: fast
Final expense policies are designed to provide financial protection during a vulnerable time for your family.
Compare No Exam Life Insurance Policies
| Simplified Issue | Guaranteed Issue | Graded Benefit | Final Expense | |
|---|---|---|---|---|
| Health Questions | Yes | No | Yes | Yes |
| Wait Period For Full Benefit | No | Yes | Yes | No |
| Capped Coverage At $50,000 | No | Yes | Yes | Yes* |
| Medical Exam | No** | No | No | No |
*Some final expense policies cap at $100,000.
**Some carriers use Accelerated Underwriting, with the possibility of a medical exam being ordered.
Communicate with your independent agent whether or not you are okay with a chance of an exam.
Bottom line – Different types of life insurance without a medical exam exist. Be sure to know the differences to determine which one is the best fit for you.
What are the Benefits of Riders?
Often overlooked, riders are provisions to your life insurance contract that provide additional benefits.
Let’s examine the most popular riders offered with no exam life insurance:
- Accidental Death Benefit: An additional amount paid should you die in a qualifying accident.
- Accelerated Death Benefit: The option to accelerate a portion of your death benefit should qualifying medical needs arise.
- Waiver Of Premium: If disability occurs, the ability to keep your policy in force without paying your premiums.
- Child Rider: In addition to covering your life, your child will have life insurance coverage under your policy.
When you are deciding which no physical life insurance company to apply with, be sure to be familiar with their available riders.
Each company’s riders are different and an independent agent should help you compare and contrast.
No Exam Life Insurance for Smokers and Tobacco Users
Smokers and tobacco users can purchase no exam life insurance. In fact, most no exam life insurance carriers offer coverage to smokers.
There are 4 things you need to know about smoking and no exam life insurance:
1. No Exam Will Usually Cost More for Tobacco Users
If you are otherwise healthy, we’re not talking a big difference in cost.
For example, let’s compare no exam and medically underwritten rates for healthy male and female tobacco users (remember – these are samples only):
- Male, 30 years – $250,000 for 20 year term – no exam: $46.62 per month // medically underwritten: $39.77 per month
- Female, 30 years – $250,000 for 20 year term – no exam: $40.23 per month // medically underwritten: $32.03 per month
2. Carriers Will Want to Know What Type of Tobacco Product You Use
The type of tobacco product that you use can affect your monthly rates.
- Cigarette
- E-Cigarette
- Cigar
- Smokeless Tobacco
- Marijuana
- Pipe
- Nicotine Patch or Gum
- Vape
3. You Will be Asked About the Frequency of Your Tobacco Use
- If you currently smoke, be honest with the underwriter about how many cigarettes you smoke per day. Likewise, if you use other tobacco products, clearly communicate the amount you use daily.
- If you do not currently use tobacco but have in the past, it matters how long it has been since you used a tobacco product. For example, some carriers consider you non-tobacco after 12 months of no tobacco use. Others will only consider you non-tobacco after 24 months of no tobacco.
- Cigars tend to be in a category of their own. An occasional cigar will still allow you to qualify for non-tobacco rates from some carriers.
4. Your Overall Health is a Factor – and Not Just for No Exam Life Insurance
- Keep in mind, underwriters are in the business of assessing risk. Smoking increases your chances of health complications, and thus, potentially your life insurance premiums.
- Common medical conditions associated with smoking:
Bottom Line: Smokers purchase no exam life insurance all the time. Depending on your overall health and frequency of tobacco use, it’s possible to find competitive premium rates without undergoing a medical exam.
Pre-Existing Conditions and No Exam Life Insurance
Pre-existing conditions are very common – and securing life insurance without an exam is entirely possible, even if you have a health concern or two.
To start, let’s define a pre-existing condition: a condition, health, or otherwise, existing prior to your life insurance application.
How Do Life Insurance Companies Approach Pre-Existing Conditions?
- Life insurance companies, while it sounds impersonal, evaluate risk and charge premiums accordingly.
- A pre-existing condition is typically considered a risk.
- Your specific condition (risk) affects your ability to qualify for a particular policy and how much you will be charged for coverage.
- Carriers use in-house rating systems to determine how much to charge you for life insurance.
Common Pre-Existing Conditions and What Life Insurance Companies Will Want to Know
Let’s consider how life insurance companies, particularly the underwriters (that’s who evaluates risk), view the top ten most common preexisting conditions.
1. High Blood Pressure
How well-controlled your high blood pressure is – and any possible side effects you have experienced – are important to underwriters.
Be ready to communicate: your doctor’s records on your blood pressure, possible medications you take to control your blood pressure, tobacco use, and whether you have experienced the following: stroke, loss of kidney function, heart disease, or cognitive impairment.
Bottom line: if your high blood pressure is effectively managed, it’s possible to secure life insurance at low rates.
2. Heart Disease
A generic term that indicates a number of conditions – will be of interest during your life insurance application.
Be ready to communicate: your history of heart attack or stroke, your doctor’s records on your heart/circulatory system condition(s), your prognosis, and current treatment plan.
Bottom line: the severity of your heart disease will determine what type of life insurance you qualify for and how much you will be charged. It’s very possible to secure coverage, especially if you have a mild form of heart disease.
3. Diabetes
Again, the degree of control is what life insurance companies will be considering. Keep in mind, type 1 and type 2 diabetes are viewed differently by underwriters.
Be ready to communicate: the type (1 or 2), the age of diagnosis, complications, treatment plan, symptoms, and side effects.
Bottom line: it’s easier to be approved for life insurance with well-controlled type 2 diabetes than it is for type 1 diabetes. However, depending on your overall prognosis, no exam life insurance for diabetics is available.
4. High Cholesterol
Applicants with high cholesterol are approved for life insurance all the time. Additionally, no exam life insurance for overweight individuals is available.
Be ready to communicate: date of diagnosis, your lab results for cholesterol readings, any side effects you have experienced as a result of high cholesterol.
Bottom line: life insurance approval with high cholesterol happens all the time. Your overall health, treatment plan, and history of effective management are important.
5. Depression/Anxiety
It’s very common to be diagnosed with depression or anxiety. Underwriters will want to know about your experiences relating to the condition.
Be ready to communicate: date of diagnosis, history of hospitalizations, current treatment plan, medications prescribed, and possible side effects (i.e. your ability to work, medication side effects).
Bottom line: it’s very common to secure life insurance with depression or anxiety. Be honest and upfront with your life insurance agent in order to find the best carrier to work with.
6. Multiple Sclerosis
Underwriters will be most concerned about your type and degree of control of multiple sclerosis.
Be ready to communicate: what type of MS you have (i.e. relapsing-remitting, secondary progressive), how often you experience attacks, medications prescribed, any disability as a result of MS, and records from your physician.
Bottom line: your experiences surrounding MS will determine your ability to be approved for MS and how much you will be charged. MS that is effectively managed has a high rate of life insurance approval.
7. Cancer
Your specific cancer diagnosis is important to the life insurance company. However, life insurance for cancer patients is available.
Be ready to communicate: the type and stage of cancer, date of diagnosis, treatment history, current treatment plan – including medications prescribed, and prognosis. Be sure to have medical records available.
Bottom line: Cancer survivors are approved for life insurance all the time, and your type, stage, and prognosis are important factors in determining your ability to be approved.
8. COPD
Chronic obstructive pulmonary disease is very common. Underwriters will ask you specific questions about your COPD.
Be ready to communicate: your pulmonary function test (PFT) results, your specific diagnosis, physician’s records, current treatment plan, and prognosis.
Bottom line: Mild COPD will afford you the lowest life insurance. However, coverage is still available for those with advanced COPD.
9. Drug/Alcohol Treatment
A history of drug addiction or alcoholism will need to be reviewed during your application process.
Be ready to communicate: years of sobriety, date of treatment(s), history of DUI or arrest, any medical side effects from drug or alcohol abuse, current overall health, and your physician’s records.
Bottom line: recent drug or alcohol treatment (within 5 years) will make it more difficult to purchase coverage. Your ability to secure affordable life insurance depends on your sobriety and overall health.
10. Arthritis
Very common, arthritis sufferers purchase life insurance all the time.
Be ready to communicate: your type of arthritis (i.e. rheumatoid arthritis or osteoarthritis), health effects as a result of your arthritis, treatment plan, medications, and prognosis.
Bottom line: osteoarthritis will typically afford you lower rates than rheumatoid arthritis. It’s highly common to secure coverage, regardless of the type of arthritis you have.
At the end of the day – your specific pre-existing condition, and the health effects related to it, will determine what type of life insurance you can qualify for.
Seniors Have 5 No Exam Life Insurance Options
Plenty of options for no exam life insurance for seniors exist.
While there is no clearly defined age in the United States, most consider somewhere between the ages of 55 – 65 to be senior status.
Typically, seniors opt for one of the following types of no exam life insurance products:
1. Term Life Insurance
Life insurance issued for a specified period of time, for example, 10 year term.
2. Guaranteed Universal Life Insurance (GUL)
A type of term life insurance that is designed to last your entire life.
Note – most GUL policies require medical underwriting, but no exam options exist
3. Final Expense Life Insurance
Whole life insurance designed to pay for end-of-life monetary needs
Additionally, there are two more types of no exam life insurance for seniors not purchased often:
4. Whole Life Insurance
No exam whole life insurance lasts your whole life and accumulates a cash value.
5. Universal Life Insurance
A form of whole life insurance with flexible premiums and death benefit, and a cash value connected to investments.
Bottom Line: No exam life insurance is often an excellent fit for seniors. Keep in mind your age, term length and health status can directly affect how much you are charged for your life insurance policy.
How Much Life Insurance Coverage Should You Buy?
Your life insurance needs are entirely unique to you.
To get started, grab a pencil, paper, and calculator to consider the following five questions:
1. What are My Current Financial Requirements?
- Mortgage or rent
- Living expenses (i.e. food, utilities, bills)
- Debts (i.e. student loans, car loan, credit cards)
2. What are My Financial Goals?
- Charitable giving
- Estate
- Travel
- Private school or college tuition for children or grandchildren
- Cover funeral costs
3. What are the Financial Needs of My Beneficiaries?
- Mortgage or rent
- Tuition
- Living expenses
4. What is My Annual Income?
During your working years, life insurance is often viewed as income replacement.
You will want to purchase an amount of life insurance that would replace your annual income so that your loved ones are able to meet their financial requirements.
5. How Many Years Until Retirement?
Finally, regarding face amount and term length, calculate how many years you will work until retirement.
Not only do you need an appropriate face amount, but you will also want the policy to last long enough to provide adequate coverage.
For example, let’s say you earn $50,000 annually. You plan to work for 20 more years before retiring.
Generally, we would recommend you purchase a policy for at least your annual income, multiplied by the number of years you plan to work. In this example, $50,000 x 20 = $1,000,000 20 year term life insurance policy
Note – Commonly, life insurance needs change throughout your lifetime. We recommend purchasing an amount of life insurance that meets your current needs.
In the future, your independent agent can always guide you in making changes to your life insurance planning as needed.
4 Drawbacks to No Exam Life Insurance
There are 4 drawbacks to consider with no exam life insurance.
So, why would you not want to purchase no exam life insurance?
1. You Need to be in Decent Health to Qualify for Larger Policy Amounts
- To qualify for no exam life insurance over $500,000, generally, you will need to be quite healthy.
- For example, million-dollar no exam life insurance is only offered by a handful of life insurance companies, and they are stringent during the application process.
2. The Cost of No Exam Can be Significantly Higher in Some Situations
- Since life insurance companies are in the business of assessing risk, they will often charge you more for life insurance – if you skip the medical exam – in the following situations:
- Some tobacco users
- You are diabetic
- Other serious health condition, such as cardiovascular disease
- Typically, if you are older (i.e. 60+ years), in need of a larger policy size (i.e. more than $500,000), and longer-term length (i.e. 20 years)
3. You Have Limited Options for Policies Over $500,000
- Most life insurance companies cap their no exam policies at $500,000
- Many will need more than $500,000 in life insurance to adequately protect their loved ones
- Note – as a workaround, some choose to purchase multiple no exam life insurance policies (known as stacking insurance) from different companies to secure a larger amount of life insurance coverage.
4. Some No Exam Policies Have a Waiting Period for Full Benefits
- It’s important to understand the type of policy you are purchasing. Remember, a couple of types of no exam life insurance don’t provide the full death benefit initially:
- Graded benefit life insurance requires you to usually wait 3 years (with percentages of the benefit available during years 1 and 2)
- Guaranteed issue life insurance typically requires you to wait 2 years before a benefit is available
At the end of the day – Your best bet for determining whether or not no exam life insurance is a good fit for you is to partner up with an independent agent.
How Does Life Insurance Fit into Your Financial Plans?
Let’s consider a tree. A tree’s three primary parts provide an excellent analogy for how your finances can be categorized.
- Crown – the top of the tree
- Financial investments (stocks, real estate, etc.)
- Trunk – the middle of the tree
- Your career, other sources of income
- Roots – the base of the tree
- Savings
- Sources of cash
- Life insurance protection
Why Roots are Essential
While each part of the tree is important, truly, you need the roots to thrive in order to have a healthy tree.
Strong roots are an excellent representation of life insurance protection because, without them, you are not safe from potential storms.
It’s not fun to think about, but purchasing life insurance is the right thing to do if people you care about depend on you financially.
Your life insurance policy can protect your family during a storm: loss of life, terminal or chronic illness, loss of employment (with proper riders).
How to Apply for No Exam Life Insurance
There are 5 easy steps in applying for no exam life insurance. We will cover each step in detail below.
Step 1: Partner Up
Collaborate with an independent life insurance agent.
Here’s why: Independent agents selling insurance have your best interest in mind. They are not held captive to a particular life insurance carrier. Independent agents will shop the top-rated no exam life insurance carriers to find the best policy at the best price for you.
Avoid applying directly with a life insurance company. Let’s say a medical condition shows up on your application. That information could then be available to other life insurance companies, via the Medical Information Bureau, and potentially affect future applications.
Step 2: Electronic Application
Almost always, you will submit your no exam life insurance application electronically.
Electronic applications are cost-effective and are much faster than tedious paperwork and snail-mail.
Step 3: Phone Interview
Usually, the next step will be a phone interview. Anticipate a phone conversation lasting between 20 – 30 minutes.
You will be asked straightforward questions about:
- Your current health
- Your medical history
- The medical history of your close blood-related family members
- Tobacco use
- Occupation
- Military status
- Lifestyle
Have your medical, lifestyle, and occupation information readily available. Your application is processed fastest when you can answer all interview questions upfront.
Step 4: Database Checks
Underwriters (that’s who evaluates your life insurance application) will usually lookup records from three sources:
- Department of Motor Vehicles (DMV) – driving record
- Pharmacy – online history of prescriptions
- Medical Information Bureau (MIB) – database of previous insurance applications
Step 5: Application Decision
Often quickly, you will receive an answer to your life insurance application. Sometimes, the decision comes almost instantly – within minutes. Other times, you may need to wait a few weeks.
Expect one of three possible decisions:
- Approved as applied – Best-case scenario. You are approved for the life insurance policy you applied for.
- More information needed – Depending on the carrier, you may be required to provide more details to the underwriter if something pops up on your application. For example, let’s say you take medication for anxiety. Your underwriter may want to know the type of prescription, dosage, side effects, etc.
- Denied as applied – Sometimes, applicants are not approved for the life insurance policy they applied for. Take heart. There are plenty of life insurance options and carriers to consider. An independent agent can help you navigate this process.
Bottom Line – No exam life insurance is usually a convenient, quick, and affordable way to secure financial protection for loved ones.
