One reason why some may avoid purchasing life insurance is because they don’t want to take part in a medical exam. Some traditional life insurance policies require an applicant to undergo a physical examination performed by a medical professional, and the results of that test can play a major role in calculating policy rates or even in approving coverage at all.
Some individuals may be scared of the insurance policy rate quotes that are presented to them. Others might just assume that they won’t be approved for a plan because of their health. And still others may just be terrified of the medical exam itself and the blood work that they often require.
What if you were told that you can get a life insurance policy without having to sweat your way through needle pokes or stressful questions? Guaranteed issue and simplified issue life insurance can provide just that.
Guaranteed issue life insurance is a type of policy that operates just as the name implies: Everyone who meets the policy’s age restrictions is guaranteed to be approved for coverage and rates are not dependent on the health of the individual. Coverage is subject to receipt of payment and verification of identity as required by law and is effective upon receipt of policy.
Simplified issue life insurance also does not require a medical exam to be performed, but applicants will be asked some questions about their health and family health history. Issuance of the policy may depend upon answers to health questions set forth in the application.
What else should you know about life insurance that does not require a medical exam?
The death benefits offered by a no-medical exam life insurance policy are sometimes lower than what might be offered by some other types of life insurance. Part of the reason for having smaller death benefits is to keep premiums as low as possible. Without any medical exam to determine the state of an applicant’s health, the insurance company is taking on a significant amount of risk in providing coverage to an individual for which so little is known about their health. By keeping the death benefits relatively lower, the company can keep rates competitive.
While it’s true that the smaller death benefits can help keep premiums lower, life insurance that does not involve any underwriting will typically have rates that are a little higher than some other types of policies because of the increased risk to the insurer.
Because some forms of life insurance use medical underwriting and exams to determine rates, someone in poor health or old age may find that guaranteed issue or simplified issue life insurance offers more affordability.
Medical underwriting takes time, and it’s not uncommon for a fully underwritten policy to take several weeks to become approved and activated.
When the underwriting process is eliminated, guaranteed and simplified issue life insurance can be put into place in a matter of days. For this reason, these types of policies are often used in legal proceedings like divorce settlements or business buyouts when a life insurance policy must be implemented quickly and easily. Many lenders will even accept life insurance policies as loan collateral, and a policy that does not require a medical exam presents a more streamlined way of securing a loan.
Shopping for life insurance that doesn’t require a medical exam is no different than browsing for any other type of policy. One thing consumers can do is work with a reputable agent who can map out coverage options and compile quotes from available carriers.
Policies issued by: American General Life Insurance Company (AGL), Policy Forms: ICC15-15532, 15532, 15532-5, 15532- 10. Rider Numbers: ICC15-15200, ICC15-15201, 15200, 15200-10, 15200-35, 15201, 15201-9, 15201-10 and 15201-35. Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). AGL does not solicit business in the state of New York. Products may not be available in all states and Deleted: low Deleted: low product features and rates may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company. ©2018 AIG. All Rights Reserved.