Are those ads for ‘no exam life insurance’ for real?
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Asked January 28, 2013
There is a wide variety of life insurance underwriting available, from whole life insurance to term life insurance. Another option available, typically for specific types of permanent life insurance, is a policy which does not require any sort of physical exam. This includes some group life insurance packages as well as individual policies that are designed to meet your final needs rather than to bequeath a sum on a named beneficiary.
Some companies offer group life insurance that does not require a medical exam. These policies are usually only available for relatively small amounts, usually less than $150,000. Because the group insurance arena allows the insurance company to basically choose segments of the population to insure in this way, they are able to statistically determine a health ratio in the group and set premiums to match the expected death rate. Obviously, there will be some variation from the statistics, but the margin of error is small enough for this type of program to be effective for both insurers and policyholders.
Final expense life insurance, which is also called funeral expense insurance, is designed to pay for the funeral and other costs associated with laying someone to rest. This type of insurance is often marketed to seniors or those with preexisting conditions which could interfere with purchasing another type of whole life coverage. This type of policy usually names a funeral parlor or other service as he beneficiary, and does not provide any sort of proceeds for a surviving spouse or other beneficiary.
The important thing to keep in mind about life insurance which does not require a medical exam is that it is going to be more expensive than purchasing a similar policy with an exam. The premiums are pre-calculated to meet an expected rate of demise, and policyholders must pay the added expense. If you are healthy and do not have any health concerns which might interfere with obtaining a traditional permanent life policy, that would be the best route to consider. If there are concerns, getting a no-exam policy will allow you to have some peace of mind where your final needs are concerned.
Answered January 28, 2013 by Anonymous