Term life insurance without a medical exam: is it right for you?

Let’s face it, if given the choice, most people would want to skip the medical exam portion of the life insurance buying process.

It takes time out of your day. It gets personal. And frankly, a blood test hurts a little bit.

However, the medical exam is typically a staple of the life insurance buying process to finalize coverage, get a decision on eligibility and/or save money on life insurance premiums.

What if we told you that you don’t always need a medical exam to get high quality, affordable coverage?

It’s true.

There are ways to buy term life insurance entirely online now thanks to advances in modern technology, specifically during the underwriting process. For some healthy individuals, taking a medical exam may not always be required to finalize coverage.

But, this is not the same as a traditional “no exam” policy. Those have existed for awhile, but they typically come with some pretty significant strings attached (such as limited coverage amounts and higher premiums).

It’s important to understand the difference between these types of offerings so you can make a decision on insurance that is best, and most convenient, for you and your loved ones.

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Why life insurance companies typically require medical exams

To adequately explain who qualifies for ‘no exam’ medically underwritten policies, it’s helpful to know why and when life insurers request a medical exam in the first place.

When you fill out a life insurance application, the insurer is looking at factors such as age, health conditions, family health history, smoking, and even occupation and lifestyle choices to determine how much risk you represent to the company. Lower risk of dying? You’re offered a lower premium. As risk increases so does the premium amount.

A medical exam provides the insurer with an opportunity to verify everything you’ve filled out in the application and personalize the rate to you and your health. For people who are healthy, this is a good thing because you can wow the insurer with how little risk you represent and, ultimately, end up with a cheaper rate. And for most people, it’s a simple experience.

A paramedic visits your home or workplace, or you can go into the medical testing office. You can choose whichever location is more comfortable or convenient. You answer some questions about your medical history and family medical history and get a mini-physical. The exam tests for things like cholesterol, body mass index (BMI), blood sugar, blood pressure, and indications of nicotine, tobacco, or drug use.

Until recently, a medical exam or at least some kind of phone interview (and a waiting period) was required for all medically underwritten term life insurance policies to help provide the insurer with full transparency into your health situation.

Medically underwritten life insurance versus no exam policies

When shopping for no exam life insurance, it becomes more important to know the difference between medically underwritten term life insurance and the traditional no exam policy (known as simplified or guaranteed issue.) Especially when many search results show offers for ‘no exam’ policies.

Simplified issue and guaranteed issue policies come with a higher premium, but not for the convenience alone. The high premiums are because the insurer is taking on more risk without fully knowing your medical history.

To give you an idea of price differences, a typical 20-year, $250,000 simplified issue policy might cost a healthy 30-year-old man at least $36 per month. For $28 per month, that same man could be getting triple the coverage: a 20-year, $750,000 medically underwritten Haven Term policy.

Additionally, no exam life insurance policies often have a maximum policy value of $250,000, which means you might not be able to get as much coverage as you need (five to 10 times your salary is a standard recommendation.)

If your health allows you to qualify for a medically underwritten term policy, it’s usually your best option for ample coverage and affordability.

Medically underwritten term life insurance with Haven Life InstantTerm

With the InstantTerm process, qualified, healthy applicants up to the age of 45 may be eligible to get an immediate decision on coverage. That’s because of the sophisticated technology that – in real-time – analyzes the health information you already provided in the application process and verifies it with third-party sources.

It’s still medically underwritten coverage. And it’s still at the same affordable pricing. It’s just life insurance the modern way.

Who qualifies for coverage without a medical exam

Applicants who meet the requirements for our highest rate class, Ultra-Preferred Non-Tobacco, may be eligible for InstantTerm. These are people who are in excellent health, don’t smoke, don’t have high cholesterol or blood pressure and don’t suffer from chronic or severe illnesses.

We notify customers, upon application submission, whether or not a medical exam is needed. If they don’t need a medical exam, we provide them with a final rate offer, and when they e-sign, coverage starts and the process is complete. If a medical exam is necessary, as always, we will work with the customer to schedule it at a time and location of their convenience. For most people, you’ll have temporary life insurance coverage (called TLIC), which means you’re covered until the medical exam is taken.

Other types of ‘no exam’ life insurance policies

Traditionally, there were two types of term life insurance policies available that didn’t require a medical exam or a phone interview: Guaranteed Issue and Simplified Issue. Often, these types of policies are what show up in search results for ‘no exam’ life insurance.

As previously mentioned, if you’re young and healthy and ample, affordable coverage is what you’re after, you’ll want to make sure this isn’t the policy you’re applying for.

Guaranteed issue life insurance

Guaranteed issue works as the name implies. All applicants are guaranteed approval on coverage, but that comes with some caveats.

Guaranteed issue policies typically have a death benefit maximum at around $50,000 and come with a high premium. Because anyone can get them, even if they are smokers, have cancer or other types of illness, the risk pool is significant for insurers. And because the average risk is high, policyholders have to pay a higher premium each month for lower coverage amounts.

Simplified issue life insurance

Simplified issue policies are a better deal than guaranteed issue (but not as good as medically underwritten) for people looking to get life insurance without a medical exam. These policies typically require applicants to fill out a short questionnaire, with a few health-related questions, and no exam is needed to secure coverage.

Simplified issue policies are usually limited to a death benefit of around $250,000, but some insurers offer up to $500,000. And because there is no medical exam, premiums are often two to four times higher than a medically underwritten policy.

For example, we found that an average 20-year, $250,000 simplified issue policy might cost a healthy 35-year-old woman at least $37 per month. This pricing assumes she qualifies for the highest rate class available. For about $25 per month, that same woman could be getting triple the coverage: a 20-year, $750,000 Haven Term policy. If she wanted to stick with that 20-year, $250,000 coverage, the policy would be about $13 per month — less than half the cost.

Fully underwritten is a better value.

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The Haven Term policy is issued by MassMutual, an industry leader with over 160 years of experience.

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Getting the Best Value for Life Insurance

When shopping for life insurance, you want to make sure you’re getting the best value regarding coverage amount and what you’re paying for it. After all, you want to know that your loved ones have adequate financial protection since that’s the reason you buy life insurance in the first place.

If you’re eligible for medically underwritten term life insurance, it’s typically your best option for both high coverage amounts and affordability. Plus, the good news is: now some qualified, healthy applicants may be able to skip the medical exam via the InstantTerm process. [Keep in mind that: issuance of the policy or payment of benefits may depend upon the answers given in the application and the truthfulness thereof.]

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Haven Term is a Term Life Insurance Policy (ICC15DTC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111 and offered exclusively through Haven Life Insurance Agency, LLC. Not all riders are available in all states. Our Agency license number in California is 0K71922 and in Arkansas, 100139527.

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