Term Life Insurance Policies With No Medical Exam

For those facing poor health, chronic medical conditions, or terminal illness it may sound like purchasing life insurance is an impossible endeavor.  In actuality, there are many term life insurance products available that do not require a health exam.  "These products simply require that you pay your premium on time", noted Vince Bagni of Paramount Life Insurance.

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Guaranteed Issue life insurance plans are offered without a medical exam and they are offered to those who would not qualify for a standard term or whole-life insurance policy.  There are similar policies that do require a minimal health insurance questionnaire, or perhaps a basic physical as at least some promise that the prospective insurance customer is not terminally ill.

This may sound too good to be true, and the reality is that these products are not typically seen as high quality insurance products.  They are typically offered with limited coverage and high costs, and they are designed to pay for specific things in the event of death such as to pay off a small loan, or to pay burial or funeral expenses.  The cost per dollar of coverage policies like this is often several times higher than coverage afforded under a typical term life insurance plan.

Traditional term life insurance policies will require a medical exam to determine the potential policyholder’s general health condition.  Those in poor health may be rejected entirely or subject to a higher premium.  The type of exam will vary based on the amount of insurance you wish to purchase.  Policies that have a higher value will require a more extensive exam, as unhealthy people pose a greater risk of financial loss to a life insurance company.

Accordingly, if no exam is required, the insurer assumes that anyone who is alive, and who may have any medical condition may sign up for a policy.  This means that the insurance company’s risk for loss is much higher.  In turn, the insurance company must charge higher rates for such a policy, and they must place limitations on how much insurance they will provide under those circumstances. 

Not everyone can qualify for every “no-exam” affordable life insurance policy.  Certain types of terminal illnesses with certain types of policies will disqualify a candidate from coverage.  With a little research however, you may find a policy that is right for your particular situation.

Since life insurance is designed to provide financial protection to the survivors, this type of guaranteed issue policy makes sense as it relieves family members from having to pay for funeral expenses or existing debts from the estate of the deceased.  What a policy like this will not do in many cases is to provide much in the way of an inheritance to the survivors. 

"Guaranteed issue life insurance is not a wealth accumulation strategy that would be employed by an average person, but is rather a last resort for those who would not otherwise be able to obtain coverage.  The limited scope and high cost relegate these products to those in need of basic protection that will save family members and loved ones from having to deal with the policyholder’s death costs", noted Bagni.

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