What you need to know about 'no medical exam life insurance'

Information courtesy of USAA Life Insurance Company and USAA Life Insurance Company of New York

If you're thinking about purchasing life insurance, you may have heard about the medical exam process. You may have also heard of underwriting and other steps to buying life insurance.

While these steps may still apply, the industry is evolving. It's now possible to get what's referred to as "no medical exam life insurance."

These are types of policies that let you skip the traditional medical exam, and sometimes even the health questions. This leads to an easier buying process where you're usually approved for coverage immediately, with little to no waiting period.

There may be drawbacks like potentially higher costs and coverage limits. You may also be declined or experience delays in approval due to health history, occupation or risky hobbies. But that's not always the case.

If you're looking for a simplified process or need to buy insurance now, here are a few things to keep in mind as you shop around.

Why are medical exams common?

Insurance is a balancing act. Insurance companies need to offer an amount of coverage that lets them remain profitable, and consumers want the best coverage they can afford for their premiums.

The traditional requirement of a medical screening allows insurance companies to balance the risk of coverage with charging a fair premium.

A typical life insurance policy requires:

1. A detailed application.
2. A detailed health and lifestyle questionnaire.
3. A medical history review.
4. A physical exam.

The physical exams can include a variety of tests, such as:

• Blood tests.
• Urinalysis.
• Blood pressure measurement.
• Height and weight measurements.
• An EKG to check heart function.

Types of no medical exam life insurance

These days, there are several types of life insurance policies. If you're looking for a policy that lets you skip the medical exam, you have a few options.

Group life insurance

Most employers offer basic life insurance to full-time employees with no questions asked. But group coverage can change often and may have coverage limits.

It's also important to understand who these policies offer coverage for. Some policies only cover the employee. Others offer coverage for the employee and their family.

Members of the military have another option when it comes to group policies called Servicemembers' Group Life Insurance. This can be a great low-cost benefit that helps ease your family's burden if you die.

Here's one small point about group life insurance to consider. There's always the possibility of getting a long-term health issue that will impact your ability to get private life insurance. If you're relying exclusively on group life insurance for protection, you're running the risk of being unable to qualify for life insurance if you lose that coverage. This is why it's important to consider private life insurance in addition to coverage offered through your employer benefits.

Instant issue life insurance

Instant issue life insurance is meant to provide more traditional term coverage options at affordable prices, along with a simplified application process. This typically includes no medical exam with online questions about medical, health and lifestyle history. From there, an instant approval decision is usually provided.

Simplified issue life insurance

Simplified issue is a type of no medical life insurance that's typically available for a specified age range or duration and comes with limited coverage amounts. It's usually best for those with basic coverage needs who are looking for a starter policy or something that can help with final expenses.

Guaranteed issue life insurance

If you need coverage but know you don't qualify, you might consider this policy, which is a type of permanent life insurance. There are a few factors to consider.

1. You'll need to meet age restrictions.
2. Your coverage may be more expensive and limited.
3. These policies usually have a waiting period to be eligible for the death benefit.

Guaranteed issue policies are popular for older people who are looking to cover final expenses.

How expensive is no medical exam life insurance?

Policy prices vary by type. And while no medical exam life insurance is believed to be more expensive than traditional coverage, that's not always the case.

Your first step is to take the time to figure out what type of coverage is best by calculating how much life insurance you need. From there you can narrow down the life insurance that's best for your goals and determine if the cost fits within your budget.