Is No Medical Exam Life Insurance Legit? - Cravitz Financial & Insurance Solutions

Is No Medical Exam Life Insurance Legit?

Many people wonder if no exam life insurance is legit. Why do some companies require you to take an exam, but other insurance companies do not require it? Should you be concerned about the safety or security of a company that doesn't require a medical exam?

In this video we'll address these questions and more.

Full Transcript:

Hey, everybody. It's Ryan here. All right. So, I've got a question for you. Is no medical exam life insurance actually a scam? Well, I'm going to tell you the truth. And the truth is that no, no medical exam life insurance is not a scam. In fact, it's a hundred percent legitimate, but there's definitely some confusion, some misunderstanding that comes with understanding what no medical exam life insurance is all about. And oftentimes, I get asked the question, well, are the insurance companies that offer no medical exam life insurance, are they legitimate? I mean, how can one company not require it, and another company does require it? Are they maybe not as strong and stable and secure of an insurance company? Should I be worried? Is there something I don't know? Right? It's always the question that comes up. So, want to put together this short video, explain what no medical exam life insurance is all about. Maybe ease your mind about a few things if you have some concerns and are considering no medical exam life insurance.

Alright. So, first off, understand this, is that if you're applying for no medical exam life insurance, that the insurance company is still going to underwrite your application for coverage. So, a medical exam is just one part of the process typically, but if a company doesn't have a medical exam as a part of that process, they're still going to review your application. And on your application, there are several questions about your medical history, your lifestyle habits, your family history, and all the rest of it. Also, an insurance company may very well obtain your medical records. Now, of course, with your consent, you would have signed a form that allows for them to be able to do that, but they can also, review your medical records, where they can take a look at your full medical history, and they can learn a lot from that.

Another thing that they can do is that they can run a prescription drug check, and they can see what prescription drugs that you've been prescribed and that you've been taking over the last several years. Also, they'll check your motor vehicle report, see if you've had any tickets, accidents, DUIs, that sort of thing. Right? So, insurance companies do a lot of things, still, when evaluating you for coverage for life insurance. Again, it's not just the exam. Now having said that, there are typically different rules and parameters around who can qualify for no exam life insurance. And that's going to vary from insurance company to insurance company and product to product and that sort of thing. But here's the thing, is that understand first, from the life insurance company's perspective, why might they offer a no medical exam life insurance policy to its consumers?

Well, one reason is strictly just the marketing end of this, is that if you're a consumer, which I'm a consumer just like you, all things being equal, I'm going to take the policy that doesn't require me to do the medical exam purely just for the convenience sake. So, it's nice to skip it, get the policy in place and move along with my day. But, there's other factors that play here, certainly, as well. One of them is the cost of the exam itself. Remember, who pays for that? The insurance companies do. And typically they look at that as a cost of doing business. So, if they don't have to pay an examiner to come out to your house or your place of business to do an exam, the insurance company gets to save some money on that cost right there. Now, another thing that insurance companies will do is that they will oftentimes limit who can buy this coverage.

So, there may be an age limitation. For instance, like one insurance company, I'm thinking right now, if you're over the age of 60, you can't get any life insurance with them without taking a medical exam. Now, there's other companies you can over the age of 60, I'm just giving you one example off the top of my head. Also, this same company, you can get up to $500,000 of life insurance, but if you want to apply for even a dollar more than that, you could not get it without having to take a medical exam. So, they still do limit their risks. The insurance company is limiting their risk. Generally speaking, all things being equal, younger people are less of a risk. And also, certainly, only issuing up to let's say, in this example, I'm giving you up to 500,000, that would be less risk for the insurance company than offering more coverage than that.

So, there are going to be some limitations as far as that is concerned. Another thing that insurance companies will do, and there's different types of no medical exam life insurance, at least from the underwriting perspective. So, some companies will have no medical exam, life insurance, and they also don't go out and obtain your medical records either. Now that's nice from the convenience standpoint, because oftentimes, if you can be approved for coverage, you're going to be approved pretty quickly, because there's no exam to do. It saves a lot of time than not having to obtain your medical records. So oftentimes, some companies can approve you in a day, a few days, a week, sometimes two weeks, it could be a very fast process. But, the downside is typically those rates are going to be quite a bit higher than what you could potentially get if you did the long and drawn out process of taking the medical exam and insurance company obtaining your medical records and all that.

The other type of no medical exam life insurance is where an insurance company will still go out and obtain your medical records, and insurance companies kind of learn a lot by looking at your medical records. So, typically with those, you can still get rates that are, I don't want to say maybe exactly the same that you could possibly get if you did take a medical exam, but you can get them pretty close. You can get rates that are pretty darn competitive, but again, you have to wait, and the typical underwriting time periods with most insurance companies when they have to obtain your medical records and such can be anywhere from four to eight weeks. It really depends. Most of it depends on how long it takes for the insurance company to be able to obtain the medical records from your doctors and such, so that can definitely take some time. So, there's different options as far as all of this is concerned. But bottom line again is this, no medical exam life insurance is a hundred percent legitimate.

It's just, there's going to be different rules and parameters as to how much coverage, who can get it, the age requirement, how much coverage, these types of things. And, that's really what it is. Again, it's also a cost savings to an insurance company because they don't have to pay the examiner. And then with some policies, they're going to charge you more than if you did have to take the medical exam, and the results of your exam came out great and you got the best rates in town, so that's really how all that works. One of the confusion that I do find around no exam life insurance is that people get no exam life insurance confused with guaranteed issue life insurance. Now with guaranteed issue life insurance, there's no medical exam either. There's no medical records the insurance company gets. In fact, there's no health questions or anything that are asked at all, hence by the name. With guaranteed issue life insurance, everybody gets approved that can apply.

And what I mean by can apply is oftentimes the policies that are offered are for people between the ages of 50 and 85. Now, different companies, that varies a little bit, but as long as you're within those ages, you can get coverage and they will limit how much you can get. So, a lot of these policies won't cover you for than like $25,000. And if you were to pass away within the first two years, they won't pay that full $25,000, if that's what you had applied for. They won't pay the full amount of the death benefit. All that they will pay if you were to pass away within the next two years, to your beneficiary, and it varies from company to company, but oftentimes they'll just refund back the premium that you had paid, perhaps some interest, that sort of thing.

So, again, each company is going to have a little different rules there, but bottom line is that guaranteed issue life insurance is guaranteed. You can absolutely get that. The only people that should buy guaranteed issue life insurance are people that are not healthy enough to get any other type of life insurance policy that is out there, so sometimes I will hear that as well. "Hey, I knew someone that bought a policy passed away after a year and the insurance company didn't pay the benefit." And people think that that's because it was a scam. Well, no, it was probably because they bought a guaranteed issue life insurance policy. All right. So, hope that clears some things up for you. If you have any questions on this, feel free to reach out. Take care, and I look forward to talking to you next time.


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