Why no exam life insurance?

More and more people are choosing to apply for life insurance with no physical exam over the traditional, fully underwritten option. While each person has their own reasons for making this choice, there are several that stand out.

I have helped hundreds of people find life insurance and in my experience the top reasons for going the no exam route are as follows:

  • Time is of the essence
  • You can’t handle needles
  • You have a few minor health issues
  • It’s been several years since your last physical
  • Your build is outside the standard charts

Most people I talk to have one of more of these reasons to opt for a no exam life insurance application process.

Time is of the essence

There are several reasons why you might need to put life insurance in place quickly, including requirements for obtaining an SBA business loan, a buy-sell agreement with business partners or the company, the terms of a divorce, or you simply want to get the process done as expeditiously as possible.

Many life insurance companies have adapted to our modern society’s demand for efficiency. Most people don’t want to wait months for a life insurance insurance policy to go in force.

You can’t handle needles

If the idea of needles and giving blood makes you weak in the knees, you’re in luck. There are options for no exam life insurance where you not only never have to see a nurse or doctor, but no blood or urine samples are collected either.

A lot of people are uncomfortable with medical procedures and the mere act of getting their blood pressure and heart rate checked make those very readings go up. Not exactly an ideal scenario when you’re hoping to score the best premiums on your coverage. Try telling an insurance underwriter that your sky-high blood pressure was just caused by the nurse sitting in front of you.

You have a few minor health issues

Don’t get me wrong, life insurance companies are in the risk mitigation business. Before any company will extend coverage, it will complete its due diligence. That includes looking your into your health and medical history, your prescription history, your driving record, your MIB record, etc.

No exam life insurance doesn’t mean that your health and medical history aren’t considered. But these types of policies typically come with a wider range of what’s acceptable, while still fitting inside of a standard risk category. That can save you a lot of money on premiums if a comparable fully underwritten policy lands you in a sub-standard risk category due to those health issues.

We’re talking about minor health issues, typically. For example, if you’re taking a few prescription medications for high blood pressure and/or high cholesterol, or controlling your diabetes with one or two oral meds, there should be no problem going the no exam route. In fact, if it’s been a while since your last full blood panel and physical, then the blood test that’s part of a fully underwritten application may uncover some things that your doctor hasn’t yet.

That doesn’t mean you would be declined coverage, although it could depending what the tests come back with. It’s more likely to result in higher rates because of that newly found information. So, if as far as you know and your medical records show today, you don’t have any major issues, then going the no exam route makes a lot of sense from a financial standpoint.

It’s been several years since your last physical

I touch on this in the previous point, but I think it deserves its own discussion. Not everyone I speak to gets a routine physical, or an annual checkup. Whatever you want to call it, seeing your doctor about once a year has its advantages. If any of your numbers start changing, there’s a baseline to see when things might have taken a turn and minor corrections can be made.

Maybe your diet changed since your last visit or you’re not exercising as much as you used to. Or maybe you’re experiencing more stress lately and your blood pressure is much higher than it has been. Getting regular checkups can help manage these types of things.

On the other hand, if the last time you had a full physical with blood work was more than a couple of years ago, there’s a certain probability that a fully underwritten life insurance application could uncover something you weren’t aware of.

If it’s just high cholesterol or blood pressure, then it shouldn’t be a big deal. But if you’re a man, for example, and your PSA is sky-high (an indicator of prostate cancer) than you’re looking at a declined application and loss of insurability with just about every carrier moving forward. At least until you undergo further testing and an official diagnosis is made by a physician.

Once the reason code for that declined application is on your MIB record, it will be pulled by the next insurance company you apply with (and the one after that)…regardless of whether that’s a no exam policy or fully underwritten. That will result in another decline.

Your build is outside the standard charts

Age and build [height & weight] are the foundation of life insurance eligibility and pricing. This combination sets the basis for your risk category. Any health issues, medical history, tobacco use, bankruptcies, etc are stacked on top of that initial risk category.

If you’re on the heavier side, you’ll typically save a good bit of money with a no exam policy over fully underwritten. That’s because no exam policies have wider weight bands in their underwriting guidelines. Here are a couple of examples to illustrate how a no exam policy can cost less than fully underwritten when build is an issue.

30-yr term$400,000$400,000
No exam$235.73/mo$189.53/mo
Fully underwritten$381.07/mo$242.38/mo

* This example is using the same life insurance company and same product, offered with a choice of no exam or fully underwritten underwriting process. *

So, if you’re on the heavier side, but otherwise healthy, a no exam policy will often save you a good bit of money over a ‘rated’ fully underwritten

In summary, there are several reasons to consider applying for a life insurance policy that does not require a physical exam. More than I’ve covered here, but this wasn’t meant to be an exhaustive list. Life insurance companies have been responding to market demands and it’s clear that most of us would prefer not to undergo an intrusive exam and have to wait weeks or months for a response to our application for coverage.

With today’s incredible amount of data available to assist the underwriting process, the no exam route has become advantageous to both consumers as well as life insurance companies.

If you’re interested in discussing your best options for coverage, reach out today or fill out the instant quote form on this page.