Before they’ll insure your life, most insurance carriers want to know whether you have any medical conditions or lifestyle behaviors that statistics say will shorten your life and increase the odds they’ll have to pay a death benefit sooner than they’d like. So most life insurance policies, especially whole life policies, require a medical exam. At bare minimum, they’re going to require that you complete a health questionnaire (and willfully lying on it will cancel their obligation to pay death benefits). There are, however, some companies sell life insurance with no medical exam requirement. Here’s what you need to know about them.
Term insurance is the only kind of life insurance with no medical exam that you’re going to be able buy. Term life insurance provides death benefit protection for one or more years (hence the name “Term”). If you die during the term of your policy, your beneficiaries receive all or part of the death benefit. Again, the amount of the benefit paid vis a vis when you die during the term of the policy will depend on the individual contract. That’s why it’s always important to read the fine print and no what the limits and exclusions are before you buy. For example, some no medical exam life insurance policies may limit payout for the first two to three years after you purchase. In other words, if you die during the first couple years of the term, your beneficiaries get zip death benefit, although the accidental death provision may pay out up to 50% of the policy value.
Term life insurance premiums are quite affordable for healthy people up to a point. Once you turn 50, the premiums are going increase progressively. If you’re considering this type of life insurance policy, the earlier in your life that you buy it the better, particularly if you buy a policy that locks in your premium for the duration of the term. Some companies won’t even write term life insurance after you turn 65.
Term life insurance with or without medical exam requirements do not have cash value or loan value. That’s one of the reasons for the relatively low premiums compared to whole life policies.
Term life insurance is an excellent value if you are looking for the biggest immediate death benefit for each premium dollar you pay. It’s also an excellent choice if you want to make certain your surviving spouse can pay the mortgage, send a child to college, pay off outstanding debts or have cash to replace the loss of income caused by your death.