Today, many insurance companies offer accelerated underwriting no exam life insurance because they recognize the aversion that many people have toward the life insurance medical exam. While traditional policies require applicants to undergo an exam in order to qualify for coverage, accelerated underwriting lets applicants bypass it completely.
Why Do People Want to Skip the Medical Exam?
There are many reasons why someone would want to skip the medical exam aspect of the life insurance application. For one, it’s inconvenient. While insurers cover the cost, you still need to schedule the appointment and take a half hour or more out of your busy schedule to do it. Then, you need to wait 4-8 weeks for results from the life insurance company. In short, it’s a hassle.
Another reason people want to skip the exam is because they’re scared of doctors or needles. The exam requires a blood test, so those who have a fear of needles get filled with dread. So much so that they push off getting life insurance altogether.
Why Do Insurers Require a Medical Exam?
Traditional life insurance policies require a medical exam because that’s how underwriters assess how much of a risk each applicant poses to the company. Insurers, after all, are companies, and they don’t offer coverage out of the goodness of their hearts. They need to make a profit. That means they need to assess each applicant’s health status, and from that, determine how much to charge them in monthly premiums.
Insurers put people who are young and in good health in the highest class rating, so they get the lowest premiums. Insurers put those with mild health issues in a slightly lower class, and their premiums are raised slightly. For example, insurers always give smokers a lower class rating because of the statistics of smoking and mortality. People with serious health issues either get very high premiums or are denied coverage entirely.
How Accelerated Underwriting No Exam Life Insurance Works
Certain applicants who apply for accelerated underwriting no exam life insurance are allowed to skip the medical exam. Skipping the exam shortens the underwriting process, so it can take just a few days or even hours.
How does it work? When you apply for accelerated underwriting life insurance, insurers use sophisticated algorithms that can determine whether your health status will be a great risk for them. Additionally, they are able to quickly gather information from third parties, like the MIB, which stores previous life insurance applications, pharmacies, and the DMV.
If the algorithms determine that you don’t pose a great risk, your application gets sent for accelerated underwriting. The insurer usually approves coverage immediately or within a few hours. If the algorithms determine that you do pose a certain level of risk to the company, you will be asked to take a medical exam.
That’s the main downside of accelerated underwriting — unlike other types of no exam life insurance, in which you are guaranteed that you don’t have to take a medical, with accelerated underwriting there is no such guarantee. If the insurer considers you healthy enough, you can skip the exam. If not, you have to take it. Bear in mind that even if the insurer requests that you undergo a medical exam, you don’t need to. You can simply say, “thanks but no thanks,” and choose a no exam policy that doesn’t require an exam.
The reason you might want to apply for accelerated underwriting no exam life insurance first is because the rates can be significantly less than other types of no exam life insurance. You can get a free quote here to get an idea of the costs. Because accelerated underwriting involves a certain level of risk assessment, rates can be very competitive.
Other Types of No Exam Life Insurance
Simplified issue and guaranteed issue are two other types of no exam life insurance. Both of these guarantee that you won’t need to undergo a medical exam in order to apply, but only guaranteed issue guarantees approval. Simplified issue is more similar to accelerated underwriting. For these policies, insurers require some health information and they also pull certain medical information. If you have a serious medical issue, you’re not likely to qualify for simplified issue.
On the other hand, anyone under the age of 89 or 85 can get approved for guaranteed issue no exam life insurance. It’s a very convenient application process, but the downsides are that it limits coverage to $25,000 and includes very high monthly premiums.
Which Type of No Exam Life Insurance is Right for You?
If you’re set against a life insurance medical exam, you have plenty of options for policies that don’t require an exam. Accelerated underwriting is the least expensive option, and if you don’t have serious complications, it’s always worthwhile to apply for this kind first. If you qualify to skip the exam, great. If not, you can try for simplified issue. Insurance experts consider guaranteed issue a last resort because of its limited coverage and high costs, and they usually only recommend it to people who can’t get any other kind of coverage.