Is a no medical exam policy a good idea?
We’ll explore 4 of the top reasons it may be:
- You need insurance coverage in place as quickly as possible
- You have not had an opportunity to visit your doctor for a while
- You have a phobia of doctors, needles, and/or blood
- You do not require a really high amount of coverage
1) You Need Insurance Coverage in Place as Quickly as Possible
More traditional types of life insurance require applicants to go through an extensive underwriting process that takes between 6 and 8 weeks on average to complete.
Situations this period of time may be too long include the following:
You don’t want to take 6-8 weeks to protect your loved ones.
The traditional life insurance process with full underwriting can be long. You want the peace of mind that you have insurance in place at the earliest opportunity.
You are applying for an SBA loan:
The majority of SBA loans will not be issued until the borrower has a life insurance policy in place. If you have a loan application in process or are expected to apply for a loan in the near future, a non-med insurance policy can help you to put the required life insurance in place with minimum delay.
You are in the process of a divorce.
In some cases, one of the spouses may need to have life insurance coverage with his or her former spouse named as the beneficiary.
A non-med insurance policy can be ideal in situations in which you will be required to prove you have insurance coverage in place before the divorce can be finalized. It can be put into place within days and will prevent any delays in the divorce settlement.
You are in the process of selling or assigning pension rights or an alternative structured settlement income stream to a third party.
You may be required to have a life insurance policy in place that names the purchaser as the beneficiary.
This is designed to protect the purchaser from any losses he or she may incur if you die before all the required payments have been completed.
If you have a vacation or long time out of the country planned.
If you are planning on taking a vacation with very little notice, you will not have time to attend a medical examination and complete all the required forms. In such cases, a non-med insurance policy can be ideal.
How quickly can non-med insurance coverage go into effect?
If any of the above situations apply to you, you’ll be relieved to learn that some companies can approve your life insurance coverage within just a few days. In some cases, coverage can be arranged in a matter of minutes.
2) You Have Not Had an Opportunity to Visit Your Doctor for a While
The date on which you last visited the doctor can have significant ramifications on your ability to secure life insurance. In some cases, it can actually mean all the difference between your application being granted or denied.
If more than two years has passed since you last visited the doctors, it is important that you think carefully before applying for a insurance policy. You may THINK that you are in great health; however, there is a real chance you could be suffering from a medical condition that doesn’t become apparent until you have undergone a full paramedical exam.
Even if you did get a full clean bill of health during your last visit to the doctor, you have no real way of knowing what state your current health is in.
For example, any of the following may have changed:
- Blood pressure
- Blood sugar
- Urine protein content
The bad news is that just a minor change in any of the factors that are assessed as part of an insurance medical test will mean that your coverage cost more.
When applying for non-med insurance coverage, only the most recent information that is available in your records will be taken into consideration. As such, if all your statistics were at a good level last time you visited the doctors, why risk going through the medical examination?
There’s another important reason as to why you should think carefully about applying for traditional life insurance coverage.
The majority of insurers are members of a service that is operated by the Medical Information Bureau (MIB). This is pretty much a credit bureau for insurers that was created to help insurers share information in a bid to reduce fraud and increase efficiency.
The MIB holds a central information repository for applicants’ health and application data that can be accessed by any insurance companies. As such, if you take a medical examination and the results are not favorable, important information about the tests you completed will remain in a central system and impact all future life insurance applications.
So what’s the best approach?
If it has been a while since you visited the doctor and there is a risk your physical condition may have deteriorated, put non-med coverage in place first.
You can then later apply for a life insurance policy where you undergo the full underwriting process if you want to secure a better price for your coverage. In the event your health has deteriorated, and the life insurer offers you a high rate, you then have the ability to decline the insurance because you already have your non-med coverage in place.
On the contrary, if you get the all clear following the medical examination, you can cancel the non-med policy once the new coverage is in place.
This is a much better approach than doing things the other way round; i.e., applying for a non-med policy AFTER being declined or offered a high rate for traditional coverage. Essentially, once an insurance company uncovers any negative information about your health, it will formally go down on record and will be accessible by all life insurance carriers, both med and non-med.
3) You Have a Phobia of Doctors, Needles, and/or Blood
If you find the prospect of undergoing a medical examination daunting, don’t worry; you are not alone. Many people have an inherent fear of visiting a doctor or clinic (white coat syndrome), and accessing medical facilities can cause these individuals a significant amount of stress and anxiety.
Interestingly, if you suffer from white coat syndrome, the anxiety you experience when you do undergo a medical examination may be enough to temporarily increase your blood pressure levels.
This could be an issue if you are undergoing a medical examination in a bid to obtain life insurance because a high blood pressure will raise a red flag to potential insurers.
In fact, blood pressure issues are one of the top reasons why insurers offer applicants a lower class of health coverage than they applied for.
You can completely avoid any fear and anxiety by skipping the medical examination altogether and securing non-med coverage.
4) You Do Not Require a Really High Value of Coverage
If you are looking for life insurance coverage much in excess of $1 million, a non-med policy may not suitable for your needs.
Principal life insurance company offers coverage of up to $1 million without the requirement for completing a medical; however, applicants must be in excellent health to access these policies. As such, they are not suitable for everyone.
On average, the highest amount of coverage that is available on non-med policies is around $500,000. However, if you want more coverage than this, you can consider combining multiple non-med policies from different companies. This is completely legal and acceptable.
If you’re unsure how to proceed, secure the services of an independent broker who can work with you to identify the most cost-effective approach to securing life insurance that meets your unique needs.
I’m happy to help.