It may not be advertised as much as “ED” medications, but there is no lack of attempts to get you to look at various life insurance offers that hang their hat on the fact that you don’t have to take an exam.
“No exam” life insurance is known as simplified issue life in the business, simplified meaning you won’t be bogged down with an exam. A lot of people hear “no exam” and assume that it is guaranteed issue life insurance, a whole other animal.
So what do you gain by not taking an exam? Well, that’s it. You won’t have to take 20 minutes out of your life and provide blood and urine specimens to an examiner that comes to your home. It doesn’t mean they won’t ask health questions on the application and it doesn’t mean they can’t still decline you based on information on the application, in your medical records or in the Medical Information Bureau. It just means you don’t get a free checkup.
So what do you lose by not taking an exam? In most cases the answer is plenty. Simplified issue life insurance is generally underwritten at higher than normal standard rates, so if you’re in good health you stand to leave a lot of money on the table for no truly good reason. You also lose access to a lot of products that aren’t offered with simplified underwriting such as longer term insurance products and no lapse guarantee universal life.
So, to summarize “no exam” life insurance, if you’re in good health it’s a bad deal and if you’re in poor health you will be declined. Looking hard for the upside to that scenario!!
And as I mentioned, this isn’t to be confused with guaranteed issue life insurance where there is no exam and there are no questions and almost always there is no death benefit for the first 2-3 years. It’s always sold as whole life insurance and is excruciatingly expensive and comes in small increments, the largest usually being $50,000. They do guarantee to provide life insurance. It’s just not a product for the faint of heart.
Bottom line. The easiest and most prudent route for acquiring life insurance is to suck it up and get traditional insurance that includes an exam. That 20 minutes you invest will reward you for years to come.
I was actually shopping around to see how no exam life insurance plans are different from other policies.
Some guaranteed life insurance plans are actually designed specifically for elderly people from age 50 and up, and those are not usually the people in really good health. The rates are probably premium but at least these people won’t get denied.
The products you are referring to are in fact designed for us folks over 50, designed to play to our fears that our age and health will keep us from qualifying for better products and rates. By far, most of us old folks will qualify for better deals than Gerber or any other guaranteed issue life insurance carrier will offer.
People should take the exam and find out first. They can always go back and get guaranteed issue.