No Medical Life Insurance Q&A

Life insurance, like many of our life decisions, is a deeply personal decision. Everyone out there who has made the decision to seek life insurance coverage does so because of a desire to protect something dear to them. Whether that be family, friends, or a business, life insurance remains one of the most effective ways to ensure that your loss won’t burden those around you.

Income Replacement - Without you around to pay the bills, how will your spouse or children continue to provide for themselves? Life insurance can provide a lump sum benefit that ensures that your family’s quality of life is not affected.

Debt Protection - Leaving your loved ones with burdensome debt can cause considerable financial hardship. Your coverage can help ensure that your debt does not outlive you.

Cover Final Expenses - Losing a loved one is hard enough without worrying how to cover funeral costs and legal fees. For seniors in particular, life insurance is an effective means of guaranteeing final expenses will be covered.

Covering Capital Gains Taxes - If you have something you wish to pass on to the next generation, it’s wise to make sure your life insurance can cover the taxes your beneficiaries may face when passing down property, investments, or cherished mementos.

Typically, when applying for a life insurance policy, you would be required to submit to a medical exam. What that medical exam entails for you varies depending on the provider. However, you would be required to undergo blood tests, a doctor’s examination, and other physicals which determine what policies you are eligible for, and what your premiums would be.

No Medical Life Insurance is life insurance that can be bought without the need for a medical exam. Typically, these policies fall into one of two categories: Simplified Issue Life Insurance and Guaranteed Issue Life Insurance.

Simplified life insurance replaces that medical exam with a series of health questions that are included on your life insurance application. This may range from several dozen questions about your medical history to a simple declaration that you do not currently suffer from a serious illness.

Guaranteed life insurance is a type of policy that guarantees you will be accepted, as long as you meet the age requirements. You cannot be denied for this type of policy, making it an ideal solution if you would be denied coverage due to health or insurance history.

Why you may wish not to undergo a medical exam depends on your personal circumstances, and there are many reasons why someone would want to avoid undergoing this process. However, for many, these reasons are legitimate concerns, both due to a personal motivation and from an insurance standpoint.

Personal Reasons - Many individuals may not wish to undergo a medical exam due to religious or cultural reasons associated with blood tests or needles. In this case, No Medical insurance offers an alternative for these people.

Fear of Being Rejected For Coverage - If you have been rejected for life insurance, it may be very difficult to qualify for future policies. A No Medical policy will tell you immediately if you are eligible for the policy you have chosen.

Concerns about Being Rated High - While traditional life insurance is generally more affordable than No Medical life insurance, some aspects of your personal life or health may cause you to be “rated” on your traditional application. This means you would be paying higher premiums than normal, and this would also affect future application as well. For many, No Medical life insurance offers a flat rate that can be lower than if you had submitted to a medical exam.

Being declined for coverage can limit your life insurance options in the future in the eyes of most insurance providers. In this situation, you may elect for one of two avenues to get covered even in the face of a declined application.

A Deferred Life Insurance Policy - Many life insurance providers offer a deferral period as an option on their No Medical applications. The length and detail of this deferral period vary from insurer to insurer, but typically last around two years.

A Guaranteed Life Insurance Policy - These policies do not ask about whether or not you’ve been declined coverage in the past. Many of these policies also include a deferral period as well.

A deferral period is a period of time that would be eligible for full benefits should death occur during that time. The typical deferral period lasts about two years from the beginning of the policy. After this period, full benefits may be claimed.

Should death occur before the deferral period has ended, you are generally entitled to a refund of all premiums paid plus interest. Some policies that do not contain deferral periods may include specific deferral periods for suicide, accidental death, or other causes of death.

The stipulations of a deferral period and the interest rate on a return vary from policy to policy, so we encourage you to examine your policy closely to ensure that you understand what exclusions are a part of your plan.

Most No Medical Life Insurance policies offer more than simply a death benefit and include additional benefits which are either provided as part of the policy, or available as an additional rider. Here are some of the most common benefits you may encounter on a No Medical policy.

A Living Benefit - This benefit pays a portion of your coverage early if you are diagnosed with a serious condition and given 12 months or less to live. A Living Benefit is paid directly to you, tax-free, as a means of supporting you and your family through this difficult time.

Accident Benefit - Some policies pay a portion of coverage in the event you should become seriously injured or disabled as a result of an accident. How much of your coverage is paid out depends on the nature of the policy and the extent of the injury. This type of protection commonly includes fracture protection.

Disability Waiver of Premiums - This benefit will pay your premiums on your behalf should an injury or disability negatively impact your ability to earn an income and pay for your insurance.

Cash Surrender Value - Some policies build a cash value over time. This cash value may be collected by surrendering coverage, and may provide a helpful living benefit if your insurance needs have changed since you started coverage. However, be advised that this means your coverage will discontinue.

One advantage of No Medical Life Insurance plans is that they are issued typically much quicker than traditional life insurance.

Traditional Life Insurance: May take up to 6 weeks to receive full coverage.

No Medical Life Insurance: Issuing a policy may take as little as 5 business days.

The quick issuing aspect of No Medical Life Insurance can help put your mind at ease, knowing that when you choose to get protected is when you will get protection.