What is No Exam
So what exactly is no exam life insurance? As you
can guess by the "no" in the title, it might be best to describe
what it isn't. Quite simply, no exam life insurance or non med as
it is sometimes called takes out the worst part of shopping and
applying for life insurance and follows the trends of other types of
insurance (think car or health) towards greater ease in applying and
securing coverage. Let's dig a little deeper into no exam life
insurance to understand what it is and in what situations it can
work well to provide term life insurance.
First of all, what is the "exam" were doing away
with. No exam specifically refers to the paramedical exam that is
required for most life insurance policies. The paramedical exam is
essentially a physical with a paramed nurse at your location of
choice which requires a full blood panel. It generally runs from 30
minutes to an hour and the scheduling not to mention crunching the
results, generally adds weeks to the process. Even health insurance
has gone away from requiring paramedical exams in most areas.
It's expensive, time-consuming, and generally a hassle to the life
insurance applicant. Why do the carriers require this?
Life insurance is dealing with fairly large risks
in terms of the amount that will be paid out if benefits are
triggered. A policy can run $500K or $1M with standard (with exam)
life insurance. The carriers are going to opt for any amount of
information that may affect risk that they can get their hands on.
Enter the paramedical exam! This actual medical exam (which is what
it is) is a bit overkill for lower amounts of coverage and that's
where the no exam life insurance is becoming the better approach.
For these lower amounts of coverage, not only does the paramedical
exam and underwriting process greatly slow down the time required to
get an answer back, let's face it...all kinds of things can come out
during the paramedical exam (higher cholesterol, elevated blood
pressure, elevated sugar levels, etc) that the applicant has no idea
about. Now, it can be difficult if not impossible to qualify for
coverage and if coverage is offered, it will generally be at a much
higher rate based on the uncovered health issues.
No exam life insurance through our online system is
entirely online and we generally receive a decision in a matter of
minutes. Yes...minutes. We can handle amounts up to $350K of
coverage which is a big jump over what no exam life quotes used to
run for. The ability to have a decision and policy almost
instantaneously is a huge benefit of no exam life insurance. So
what's the downside.
The cost for no exam life insurance will be
slightly higher than full underwritten policies with a paramedical
exam if a person is in perfect health. Remember the paramedical
exam's ability to uncover all kinds of hidden issues mentioned
above...it's real hard these days to get a life insurance policy
actually issued at the best quoted rate that we start with in the
beginning of the quoting process. The typical scenario is closer to
this. Applicant applies based on quoted rate. Underwriting process
takes two months and the carrier (if approved) offers rates 50-200%
higher. That's no exaggeration and we've seen it time and again.
It's so hard to have a spotless health record these days especially
at the age that most people decide to start shopping for life
insurance. No exam life insurance is priced higher (keep in mind
we're dealing with low rates for lower amounts of already cheap term
life insurance) but more likely to get issued at that amount. The
best way to find out is to run your rates through our no exam life
insurance quoting engine above.