Medical vs. No Medical Exam Life Insurance: What’s the Difference?


Buying life insurance can feel overwhelming. Because it comes with a lot of questions, many people put off purchasing a policy. According to LIMRA’s 2018 Insurance Barometer Study, 61% of people don’t buy life insurance because they put other priorities first.

With over a third of households saying they would have money trouble within a month of a loved one passing away, a term life insurance policy is a decision you shouldn’t put off.

Finding life insurance can be a frustrating process when trying to balance between affordability and quality of coverage. One factor to consider is medical vs. no medical exam life insurance.

The primary difference is that one may require a medical exam, and the other doesn’t. But like most things in life, it isn’t that easy. 

Understanding the difference between the two will help you select the best policy for you and your loved ones.

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What Is Medical Life Insurance?

Medical life insurance is called fully underwritten life insurance. Policies can take a comprehensive look at your overall health and medical history. 

It gets its name from the common requirement of needing a medical exam. The exam is like a health physical and only takes about 20 minutes.

But here’s the thing about fully underwritten life insurance: You might not need a medical exam at all.

Depending on how much life insurance you want to purchase and your answers to a few health questions, you could qualify without a medical exam.

At Everyday Life, most of our clients can buy term life insurance policies with no medical exam.

What Is No Medical Exam Life Insurance?

No medical exam life insurance doesn’t require a medical exam as part of their application process. Because non-medical policies aren’t fully underwritten, the approval times can be much faster. 

But there are a few downsides. No-exam life insurance typically:

  • Isn’t available to older applicants
  • Costs significantly more than medical life insurance
  • Limits access to more than $500,000 of coverage

There are two types of non-medical life insurance: simplified issue and guaranteed issue.

Simplified Issue Life Insurance

Simplified issue life insurance is a popular policy among life insurance companies. It includes a few medical questions about your medical history.

A simplified issue policy doesn’t require a medical exam. The company will ask you a series of medical questions to gauge your health and wellness. It can also research other information about you, such as checking your motor vehicle records or if you’ve previously applied for life insurance.

A short-cut approach with this type of life insurance policy can be tempting. The trouble you’ll run into is that coverage is usually capped at $500,000. Additionally, simplified issue policies often have higher life insurance costs.

Guaranteed Issue Life Insurance

Guaranteed issue life insurance is exactly what it sounds like: coverage you’re almost guaranteed to qualify for. Companies that issue guaranteed policies don’t look at your medical records. They may not ask you any medical questions, either.

You’re basically guaranteed to get a life insurance policy. There are a few downsides:

  • A few conditions exist that can make you ineligible
  • The death benefit can be very small – less than $1,000 in some cases
  • Graded death benefit might not pay if you die in the first few years of the policy
  • The cost is much higher than other types of life insurance

Guaranteed issue life insurance is generally the most expensive because the insurance company is taking a bigger risk. 

If you have a pre-existing condition and can’t qualify for any other life insurance, guaranteed issue life insurance is a good last resort. 

Can You Get Fully Underwritten Life Insurance During a Coronavirus Outbreak?

The coronavirus has changed life in unexpected ways since the outbreak began early in 2020. Life insurance has quickly become a hot topic, leaving many to wonder if buying life insurance is possible during the pandemic.

There’s good news: a fully underwritten term life insurance policy is possible, even with COVID-19 circling the globe.

Opting for a fully underwritten policy is a smart move considering it can save you the most money while offering the best death benefit.

You may not need a medical exam even though you’re going for a fully underwritten policy.

That’s why we recommend applying for a fully underwritten policy. After you apply, wait and see if you’re asked to complete a medical exam. We can’t guarantee you won’t need one, but most of our policyholders get term life without it.

If you are under 50, in good health, and buying under $1,000,000 in life insurance, there is a very good chance you can get by without a medical exam.

If a medical exam is required, consider that you have 90 days to get it done. We are working with our underwriting partners to find new ways to solve the logistical and health challenges of getting a medical exam during this unprecedented time, so we can work with you if it becomes a concern.

Additionally, we offer immediate temporary coverage up to $1,000,000 that many appreciate just in case the underwriting process is going to take longer. The key is to request it at the time you are applying.

Your Medical History and Pre-Existing Conditions

If you have a fear of doctors or needles, life insurance that doesn’t require a medical exam can sound appealing. You might also worry about a pre-existing condition getting in the way.

You must disclose your medical history whether you get a non-medical policy or one that requires an exam. 

If you lie on your application or try to hide something and the insurance company finds out, your family won’t receive a death benefit. 

Since you have to share the information anyway, it makes sense to opt for a policy that’s fully underwritten. It can save you money and give you better coverage options.

What if You Don’t Qualify for Life Insurance?

When shopping for life insurance, the better your health, the lower your premiums can be. Some conditions, such as a history of severe health problems or working in an industry that’s considered extremely high risk, are uninsurable at any price.

You still need to take care of your loved ones if something should happen to you. If you don’t qualify for life insurance, there are ways to protect your family financially.

1. Get Life Insurance Through Your Employer

Most employers offer group health insurance to their employees. If you have the option to buy into group life insurance, you can max out your coverage. The policy should allow you to purchase up to a set amount without answering any health questions. 

A group life insurance policy has pros and cons:

  • Prices are usually reasonable
  • The payout might not be as high as you’d like
  • It’s an excellent option if you don’t qualify for a standalone policy

If you’re married, look into group life insurance at your spouse’s workplace. Many employers also allow spouses to purchase life insurance at the group rate.

2. Self-Insure By Increasing Your Savings Rate

Self-insuring is the best option if you can’t get a life insurance policy. Being self-insured means you have enough cash to cover what an insurance company might pay.

To do this, bulk up your savings rate and increase contributions to your retirement savings.

If you self-insure, you’re financially independent. You also don’t have to pay life insurance premiums. Because you built up your savings, your family won’t worry about how to pay the mortgage, utilities, childcare costs, or other living expenses after you die.

3. Look at Credit Life Insurance

When you make a big purchase, some lenders will offer to pay off the balance if you pass away before it’s paid in full. That’s called credit life insurance.

Credit life insurance is most frequently offered by banks to cover your mortgage or by lenders if you take out a car loan or line of credit.

It’s generally not a great deal because the payout doesn’t go to your beneficiaries to help with living expenses, though not having to worry about a mortgage or car payment can be a relief. The coverage can have a high price tag, too, so consider it only as a last resort. 

Should You Get No Medical Exam Life Insurance?

You might think getting life insurance without a medical exam is the best option. You don’t have the hassle of setting up a medical exam, and there’s a lower risk of being denied life insurance.

But it comes at a cost.

When you compare the price and coverage options of a traditional medical life insurance policy to a non-medical policy, you’re better off going with the one that might require a medical exam.

The exception is if you have an uninsurable medical condition. 

If that’s the case, the most financially savvy option is to self-insure if you don’t qualify for life insurance.

But you won’t know unless you apply. You can get a no-obligation life insurance quote in less than two minutes. What are you waiting for?

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