When you apply for a term life insurance policy, the insurer may require you to undergo a health exam before they approve your application. You might not want to have this exam, and that thought might tempt you to apply for a type of policy called no-medical-exam life insurance. Be cautious, however. No-medical-exam coverage is usually not quite as simple as its name might suggest. If you are otherwise healthy, you might find it more to your benefit to go ahead and have the medical exam, and here’s why.
Why Life Insurers Perform Medical Exams
If you undergo a medical exam when applying for life insurance, the process usually is relatively simply. You will visit an approved physician, who will run standard tests (blood pressure, blood sugar, lab work and urine tests) to create a picture of your overall health.
Still, if you choose to apply for a no-medical-exam policy, you might be able to skip this step.
Regardless of whether you buy a term policy with or without a medical exam, the policy’s structure won’t change. The policy will remain active for a certain number of years, and will pay out a death benefit if you die while the policy is active.
Where the difference arises is during the application and underwriting process.
Underwriting is a process of collecting data that your insurer will use to evaluate what sort of risks you pose to them. When it comes to life insurers, one of the main risks they want to measure is your overall risk of dying. Your health is an important signal of what such a risk might be. That’s why it’s an important part of the underwriting process, in most cases.
Therefore, by undergoing a medical exam, you can give your insurer a more comprehensive picture of your health. The insurer might be able to feel more confident in offering you a preferred policy. For healthier individuals, it is almost always a better choice to undergo the exam for your application.
Healthy Individuals Should Have Exams
Often, if you are generally healthy, then by consenting to a medical exam on your life insurance policy, you might actually qualify for higher death benefits and lower premium costs. No-exam policies usually have stricter qualifications than policies that require an exam. Only those who are generally healthy, under age 50, or who want a smaller death benefit might qualify.
If you choose to go the route of a no-medical-exam policy, you might find the policy more expensive than comparable policies with exam requirements. You might additionally discover that your death benefit options are considerably less than you might qualify for on another policy.
Furthermore, just because there is no exam required, this doesn’t mean that you won’t have to answer health questions on the policy application. Therefore, you likely won’t be able to avoid the existence of a pre-existing condition, even if you skip an exam.