Contrary to popular belief, life insurance can be purchased without a medical examination and is often referred to as either non-medical insurance, guarantee issue life insurance or a simplified issue policy.
This process has become exceptionally popular over the years as it allows the insured quick and easy access to life insurance – ideal for those who want coverage now, dislike medical examinations or have a health condition that may deter them from getting insurance the traditional way.
Going this route certainly has its advantages.
Often times the life insurance company can process an applicant’s application faster, as no medical examination needs to be administered and processed. This is ideal for the individual who does not have spare time and would like life insurance immediately.
This process is also significantly easier to administrate and complete. Applicants simply need to fill out a health-status questionnaire, which will ask questions about current medical conditions and health history.
No physical will be conducted.
Finally, this route is ideal for those who have current health conditions that may render them uninsurable going the medically underwritten route. Simply speaking, if the questionnaire does not ask about a specific health condition you have then you may qualify for a better premium.
This type of insurance is also commonly associated with group or industrial life insurance.
However, life insurance purchased this way may be more expensive as the insurance company does not have your full health history and could be taking a larger risk insuring you. They cover these risks by charging higher premiums.
Another way an insurance company can protect themselves is by only offering a specific amount of coverage to these applicants. This way, they can limit the amount of potential financial loss the company would acquire.
The contestable period still applies for these types of policies and typically ranges from one to two years.
For most companies, the health questionnaires are rather thorough and generally include almost every health condition. If you withhold health information and the company figures out, your policy could be cancelled and would make getting a new policy extremely difficult.
Another disadvantage to this process is that not everyone qualifies for this type of insurance.
For example, if you are over a certain age, engage in high-risk activities or have a dangerous profession, you could be denied from obtaining this type of insurance. Some insurance companies could have more restrictions regarding their acceptance guidelines due to the nature of this type of insurance while others could be more inclusive.
Like any other situation, it is advisable to consult with a licensed life insurance agent to discuss your best option.
Want to learn more about life insurance? Read our article The Most Frequently Asked Life Insurance Questions.