No exam life insurance is famous for allowing applicants to skip the medical exam and still get life insurance coverage. A life insurance medical exam can be a hassle, inconvenient, and it also means that it will take 4-6 weeks for the insurance company to let you know if you’ve been approved. No exam life insurance, on the other hand, is super-convenient and approval takes a few weeks, at the most. In many cases, it takes just a few days. The downside of no exam life insurance is that it can sometimes be pricier than traditional policies. Sometimes, but not always.(Get a free quote here.) The reason for this is that when you apply for a traditional policy and undergo a medical exam, the insurer gets a full picture of your health and lifestyle. Underwriters then use that information to assess how much of a risk you pose to the company.
The general rules are as follows. People who:
- Are very healthy pose the least risk and get the best rates
- Have some health complications, or who smoke, get middle-of-the-ground rates
- Have more serious health complications get very high rates, or their application is simply not approved.
When you apply for no exam life insurance, the insurance company is not always able to get a complete picture of the state of your health, which is why premiums can be higher. In many cases, however, insurers can get a fairly accurate assessment, even without a medical exam. In these cases, the monthly premiums for no exam life insurance can be fairly on par with the premiums for traditional policies.
How Can the Insurance Company Get a Picture of Your Health if You Don’t Undergo a Medical Exam?
For some types of no exam life insurance, applicants must answer several health questions. But more importantly, insurance companies gather information from third-party sources. The gathering of this information is done only with the applicant’s consent, and it’s completely legal.
- Third-party sources include:
- Prescription drug history
- Lab test results
- Driving records
- Previous life insurance applications
- Prescription Drug History
Most people aren’t aware that their prescription drug history is available to life insurance companies, but it is. Therefore, it’s no use trying to hide the fact that you take a certain medication. Life insurance policies will find out by going through large databases of prescription histories. Available information includes the name of the drug, dosage, the date it was filled, pharmacy, and physician.
Lab Test Results
Even without undergoing a medical exam, insurers can get access to previous lab test results, which means that any medical issues you have will become known to them.
Driving Record
Health isn’t the only factor that insurers examine when considering an application. A history of reckless driving or DUIs is enough of a reason for an insurer to reject an application. After all, these greatly increase the risk of the applicant’s mortality. That’s why when you apply for no exam life insurance, insurers pull your driving records to make sure that you’re considered a safe driver.
Previous Life Insurance Applications
MIB Group is a member-based organization for insurers that offers a data-sharing service. This means that it stores all life insurance applications, and insurers can search its database. If you apply for no exam life insurance, the insurer will search the MIB database to see if you previously applied for another policy. If you have, the insurer will have access to most of the information on your previous policy. This helps it make an informed decision regarding your current life insurance application.
The Underwriting Process
Once the insurer gathers all relevant information about you from third-party sources, the information is given to the underwriting team. The team then uses automated data and algorithms to compare your information against statistics culled from millions of people. In this way, it assesses each medical issue you have and how much of a mortality risk it poses. All the details then get summed up into a specific risk category, which determines what your monthly premiums will be. In some cases, your health condition may pose such a great risk that you will be denied coverage.
Are You Comfortable with Third-Party Sources?
When you apply for no exam life insurance, it’s important to know that the insurer has third-party sources available to them. For some, having your information gathered from these sources might seem more invasive than the actual medical exam. For others, anything is worth the convenience of skipping the exam and getting life insurance quickly. If you’re one of the former that are uncomfortable with third-party sources, bear in mind that this is standard practice and nothing can be done without your approval.
