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What’s the Difference Between Term and Whole No Exam Life Insurance?

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You might think that in an age when you can purchase anything online instantly, you can order life insurance online in the same way. Unfortunately, for many life insurance policies, it can take between 4-8 weeks to finalize your purchase. This is due to a lengthy application process that includes a medical exam and an even lengthier underwriting period, during which underwriters pore over all your personal details. 

The good news is that there is another option: no exam life insurance. There are different types of no exam life insurance. Some offer instant approval online and others include an underwriting period, but you can have your answer within a few days as opposed to two months.

Due to its fast approval time, no exam life insurance is ideal for anyone who needs life insurance quickly. This often includes people who need to finalize a divorce settlement, secure an SBA business loan or travel. 

Additionally, no exam life insurance allows you to skip the medical exam, which can be a big relief to people who are scared of checkups or have a fear of needles. 

The main drawback of no exam life insurance is that it can be more expensive than traditional policies. Some people are willing to pay a little extra for a big convenience. Others who are in very good health can actually get similar rates as traditional policies. To find out how much of a price difference we’re talking about, you can get a free quote here. 

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What to Know About No Exam Life Insurance

Term and whole – No exam life insurance is available in term or whole policies.

No medical exam is required – Which means no needles or urine samples, and no taking time out of your busy schedule. 

Fast approval – Approval can be immediate or take about a week, which is much faster than the 4-8 weeks it takes for traditional policies. 

Limited coverage – Coverage is usually capped at $1 million, which in many cases is more than enough. 

Age limits – While age limits vary by carrier, the maximum age is usually between 60-70. 

May be more expensive – Depending on your age, gender, smoking status, and several other factors, no exam life insurance may cost more than traditional life insurance.

Qualifying can be harder – Since there is no medical exam required, some insurers are stricter about who they grant approval to. That means that if you have any serious medical conditions, it might be harder to be approved.  

No Exam Term Life Insurance

No exam term life insurance works the same way as a traditional term, except that no exam is required. Both applications require an underwriting period, but with no exam life insurance, it’s simplified underwriting, not a fully medical underwritten policy.

Underwriting is required because you still need to provide some information about your health.

Underwriters also collect information from third parties like MIB, DMV, and prescription and credit reports.

They take all this information and assess whether they can approve you, and if so, at what rates. 

Generally, if you meet three specific criteria, you have a good chance of getting approved.

These include:

You’re generally healthy and don’t have pre-existing conditions

You’re younger than 50

You need less than $1 million in coverage

No Exam Whole Life Insurance

No exam whole life insurance is often called a guaranteed issue, and it’s called this because almost anyone who applies is guaranteed to be approved.

In this way, it’s very different from no exam term life insurance. 

Additionally, unlike a term policy, no exam whole life insurance doesn’t have an expiration date.

Once you buy it, it’s yours for life (as long as you pay the monthly premiums).

No exam whole life insurance often asks several “knockout questions.”

If you answer yes to any of them, your application is knocked out.

But if you answer no, you are approved with no underwriting.

These questions often revolve around whether you are in a hospice, have been given a fatal diagnosis, or whether you have HIV/AIDS.

Since there is no underwriting for this type of life insurance, insurers take on a big risk by granting coverage to virtually everyone.

With a policy that involves any level of underwriting, the insurer at least gets an idea of what kind of risk the applicant poses.

With no exam whole life insurance, the insurer has no idea. For this reason, monthly premiums tend to be very high.

Additionally, coverage is limited to $50,000. 

Term or Whole No Exam Life Insurance?

No exam whole life insurance is easier to qualify for, but it’s also significantly more expensive.

For some people, it’s their only option.

However, if you think you can qualify for a term no exam life insurance or a term traditional policy, those are most likely to be less expensive.

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