When does no-exam life insurance make sense?

Sometimes it is easier and less expensive to apply for no-exam life insurance. It can make sense if you are in good health and need face amounts of $1 million or less in term coverage.

You can protect your family without going through a medical exam. Instead, you can use a smartphone or computer to fill out a simple online application that will determine your insurance needs. You input information such as age, health history and the face amount and term you want. With the right information, you can clearly see whether no-exam life insurance is the right fit for you and your family.

With the convenience of an online portal, you typically will receive an answer as to whether you are a good fit for no-exam life insurance within five minutes. However, if a traditional paramedical exam is required of you, many companies will then align you with an agent -- not just a customer service contact. That means you can speak with a knowledgeable agent and have the confidence of working with a professional and having your questions answered. Generally, there is no fee for this service.

Low fees

With no-exam life insurance, companies usually limit the product to a term life policy, often within the range of 10 to 30 years, with face amounts ranging between $100,000 and $1 million. An opportunity to convert the policy to whole life Insurance will be offered through age 70. There are exceptionally low fees associated with no-exam life insurance, often ranging between $75 and $100, with monthly premiums consistent with companies that offer a traditional underwriting method.

However, if your height and weight is out of normal range, or your prescription or medical history is not compatible with the parameters of no-exam life insurance, you may be asked instead to set up an exam to continue the process of acquiring life insurance.

Could limit amount

Insurance companies often will limit the amount of life insurance you can apply for, usually allowing you to apply for a ceiling only if you already have a certain amount of existing insurance in place. Therefore, if you have the need for estate planning and require larger face amounts, the process of no-exam life insurance may not be beneficial.

By and large, no-exam life insurance is an easy and convenient way to take care of your insurance needs, and most insurance companies are offering it as an underwriting method to acquire life insurance.

Sandra Scanni is a registered representative of and offers securities and investment advisory services through MML Investors Service. She may be contacted at sandra.scanni@innfeedback.com.

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