Did you know that it’s possible to purchase life insurance without a medical exam? Many insurance providers rely on the medical information that you provide, as well as data retrieved by third-party data vendors, in order to determine your eligibility and your premium rate, without having to undergo medical exams. In fact, there’s also a policy available that excludes the medical questionnaire altogether.
Before you jump straight to the life insurance policy without a medical exam, you’ll want to be sure that you are knowledgeable about how these policies work. Although fast and easy, there may be trade-offs when it comes to purchasing no medical exam life insurance.
Why Insurers Typically Require a Medical Exam
Underwriting is the process that life insurance companies use to gather needed information about an applicant and calculate the applicant’s premium rate. Generally, the underwriting process includes answering questions about personal demographics, past and present medical history, lifestyle, and the medical history of your family.
Insurance providers gather your physician’s medical records and utilize third-party data vendors for retrieving information relating to your prescription medication history, previous applications for health and life insurance, and your driving history.
According to Laura Boylan, head of underwriting for Haven Life, life insurance providers began adding medical exams to their underwriting process around the 1980s so they could gain more insight into the health of its applicants.
The life insurance medical exam usually takes approximately half an hour and includes recording your vital signs such as pulse and blood pressure, your height and weight, and submitting urine and blood samples. In some cases, older adults, or those looking to get several million in coverage, may need to have a cognitive test, EKG, and/or stress test on the treadmill.
If a medical exam is required, the results will confirm the information you’ve already disclosed on your application or shed light on medical issues that you might not be aware of.
Naturally, those who are healthiest receive the lowest rates for coverage. Premium rates for life insurance coverage are dependent on the health class that the applicant falls in, which is determined by the underwriting process.
Here is a comparison table showing rates per health classification. These rates represent a $500,000 20-year term policy for a female applicant:
| Age of Applicant | Standard | Standard Plus | Preferred | Preferred Plus |
|---|---|---|---|---|
| 25 | $29.66 | $26.07 | $19.22 | $16.50 |
| 30 | $30.77 | $26.92 | $20.07 | $16.67 |
| 35 | $33.04 | $29.75 | $22.63 | $18.19 |
| 40 | $45.21 | $40.01 | $30.02 | $25.26 |
| 45 | $68.83 | $58.82 | $43.81 | $38.04 |
| 50 | $98.51 | $85.32 | $67.46 | $56.43 |
| 55 | $153.21 | $125.51 | $100.89 | $89.77 |
| 60 | $247.63 | $222.72 | $173.00 | $159.45 |
It’s clearly evident after a quick glance at this rating table that there are significant savings in life insurance the healthier an applicant is. Especially if we consider premium payments over a twenty-year period. When a policy is fully underwritten, the underwriter has a much clearer picture of the applicant’s health and can feel confident about the rate class being assigned.
With a medical exam and blood/urine analysis in the picture, along with reports from the MIB and Prescription database, an applicant can be offered the lowest possible rates available as long as they are in excellent health and comfortably within the limits of the insurer’s height and weight guidelines.
Why Insurers Offer Life Insurance without a Medical Exam
Fortunately, over the past decade, more life insurance providers have begun offering life insurance without a medical exam. Although it may seem strange to eliminate the best route to acquire an accurate depiction of your overall health, many insurers are choosing to shift away from using 
medical exams.
Adam Erlebacher, CEO and co-founder of Fabric, an online insurance platform, explains that “the key reason is the convenience for the consumer.” Haven Life’s Laura Boylan explains that this shift away from medical exams allows applicants to purchase life insurance faster and easier.
Additionally, providers save money and generate more business by eliminating the medical exams associated with purchasing life insurance. Normally, the insurance company pays for an applicant’s medical exam. Therefore, by eliminating the medical exam, the cost of underwriting is reduced. This is actually great for business too because those not wanting to be hassled with a medical exam are more likely to apply for coverage.
Life Insurance with Medical Exam vs. Life Insurance without Medical Exam
Until life insurance companies began using innovative technology to underwrite life insurance policies, applicants generally paid a much higher rate for life insurance without a medical exam. Now, with 21st-century underwriting technology, applicants who are in average or above-average health, can purchase life insurance without an exam at the same or slightly higher rate than life insurance with a medical exam.
For example, a 30-year old male in average health purchasing a $500,000 20-year term policy would have monthly payments of $26.87 without a medical exam versus $25.84 with a medical exam. That amounts to less than a dollar a month for the convenience of not having a medical exam.
Types of No-Exam Life Insurance Policies
Currently, there are three main types of no medical exam life insurance policies and key differences among them, especially financially. If you’re thinking that a no medical exam policy is right for you, it’s important to be aware of the pros and cons of each type.
Accelerated Underwriting Policies
The accelerated underwriting process looks a lot like the full underwriting process in that you’ll be expected to answer several questions regarding your health, your family’s health, your lifestyle, and your financial situation. As mentioned before, third-party data vendors might also be used to collect additional information on applicants.
The risk of the applicant is determined by the data modeling, and it’s then determined whether coverage should be offered.
If the insurance provider needs further clarification about your health, you’re over the age of 50, or you’re trying to purchase a large amount in coverage, it’s quite possible that you’ll be required to undergo a medical exam.
Oftentimes, the cost of an accelerated underwritten policy is comparable to that of a fully underwritten one. Sometimes the rates of no medical exam life insurance are the same or even less than those policies that require a medical exam, depending on the carrier.
If it is not required that you undergo a medical exam, the process is usually pretty quick. You should receive the results and a coverage decision in just a few days.
Simplified Issue Life Insurance
Another no medical exam life insurance option is the simplified issue policy. With this policy, applicants typically only answer a few medical questions, such as:
- Are you currently in a hospital, assisted living facility, nursing home, or prison?
- Have you ever tested positive for HIV or been diagnosed with AIDS?
- Have you ever tested positive for, or been diagnosed with, Alzheimer’s or dementia, emphysema, or Chronic Obstructive Pulmonary Disease (COPD)?
- In the past 24 months have you been diagnosed with, or told to get treatment for, heart attack, stroke or TIA (Transient Ischemic Attack), cancer (except basal cell carcinoma), or drug or alcohol treatment?
- In the past 24 months has your driver’s license suspended or revoked? Have you been convicted of two or more moving traffic violations, or been convicted of driving while intoxicated or under the influence, or convicted of driving while impaired because of the use of alcohol and/or drugs?
The underwriting process for simplified issue life insurance uses fewer of the third-party data vendors to gather information on applicants, which keeps costs down. However, it is possible to be denied a simplified issue policy.
Guaranteed Issue Life Insurance
If you’re looking for life insurance with no medical exam, no medical questions, and guaranteed approval, look no further than the guaranteed issue life insurance policy. Age is usually the only limitation in receiving coverage. Many agents and consumers refer to this as no underwriting life insurance.
Targeted towards older adults, guaranteed issue helps to cover final expenses, such as burial. The age of eligibility depends on the company, AIG’s guaranteed issue no medical exam and no underwriting life insurance policy, for example, is exclusively for individuals ages 50 to 85.
Since anyone is eligible for guaranteed issue life insurance, regardless of health conditions, the coverage amount is typically $25,000 or less. Additionally, the cost of a guaranteed issue policy is more expensive depending on the amount of coverage.
There is a two-year waiting period, and the death benefit will be reduced if the insured passes within those two years, except in cases of accidental deaths such as a fall or vehicle accident. Most often, the insurance company will pay the beneficiary what the policyholder paid in, plus interest.
Agents refer to this as no underwriting life insurance because virtually anyone who is age-eligible and alive can get a policy issued.
In Conclusion
So now, knowing what you know, your decision whether to go for a fully underwritten life insurance policy or a policy that doesn’t require a medical exam, should be based on personal preferences and an attempt to disguise or attempt to omit a health issue. Moreover, if you are in need of a higher death benefit like $3 million or $5 million, you’ll not likely find a company willing to offer that amount of life insurance coverage without a medical exam, blood and urine tests, and in some cases, and EKG.
In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs. Being independent, I represent many highly-rated insurance companies and, because I am not beholden to any one insurance company, my focus is to find the right company and policy for each individual client.
I believe that when people shop for insurance (or anything else, for that matter) on the Internet, they are looking for a simple, non-intrusive, non-pressure method of doing so. I strive to treat my prospective clients with the utmost respect and I believe an educated prospect can make the right decision without sales pressure.