UPDATED: Mar 26, 2020
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Many life insurance policies require an in-home medical exam. For some people, it’s no big deal. But plenty of others want nothing to do with an exam. Maybe you’re perfectly healthy and believe it’s a waste of your time. Or perhaps you just don’t like being poked with needles or hopping onto a scale for a perfect stranger. All good reasons. But before you pull the plug on an exam completely, you should consider these three reasons why it may be worthwhile to take a life insurance exam.
1. You Can Save Money
Most of the time, regular term life insurance with an exam is cheaper than no exam life insurance. This is because an exam gives the life insurance company a better opportunity to evaluate your health, which means they can price these policies lower. In the absence of an exam, the company has to rely on other methods to determine the risk they are taking by approving your application. And while the other methods still provide a good picture, they are not as reliable as a current health exam and lab results.
35-year old male / $500,000 / 10-year policy / Preferred Plus rate
- With exam: $13.98 monthly
- Without exam: $15.57 monthly
40-year old female / $500,000 / 15-year policy / Preferred Tobacco rate
- With exam: $80.53 monthly
- Without exam: $92.66 monthly
45-year old male / $500,000 / 10-year policy / Standard rate
- With exam: $37.29 monthly
- Without exam: $57.05 monthly
Sometimes the difference is minimal, but not always. It’s a good idea to check rates on both regular term life and no exam term life before applying.
2. You’ll Have More Options to Choose From
Regular term life insurance with an exam offers higher coverage amounts and longer term lengths than no exam life insurance. You can buy a regular term life policy in any amount you want really, up to $100M or more, as long as you have the income and assets to justify it. By contrast, the largest no exam policy available is $1M. Of course, you can buy multiple no exam policies if you need more than that, but for one single policy, the current maximum is $1M.
The maximum term length you can buy for a regular term policy is 35 years, compared with 30 years for no exam term. Five years difference is not a big deal, especially since very few people buy term life beyond 30 years. The problem is the very few companies offer a 30-year no medical policy (only two we know of). Most companies stop at 20 years, so your options beyond that are limited.
Perhaps more important than coverage amount and term length options is the number of companies you can choose from. Although many traditional life insurance companies are starting to offer some form of no exam policies (e.g., true no exam, accelerated underwriting), not all companies do. Your options for a no exam policy from a decent, A-rated company are limited to about ten. Whereas your options for a policy with an exam are practically unlimited. You can buy a regular term policy from literally dozens of A-rated companies.
3. Free Exam and Lab Work? Yes, Please!
Health care is expensive. According to Healthcare Bluebook, a 15-minute office visit with a physician for an established patient costs $96 on average in Reno, NV. Throw in these common lab tests usually completed for an insurance exam and things start to add up:
- General Health Panel: $130.00
- Comprehensive Metabolic Panel: $34.00
- Kidney Function Panel: $28
- Lipid Panel: $43
- Liver Function Panel: $27
Healthcare Bluebook also notes that lab tests can cost 3 – 5 times too much, depending on where you get them done (doctor’s office, hospital, etc.). Wow. Even with insurance, you’re potentially looking at some hefty out of pocket costs.
So, when we tell you that your application includes a free in-home exam, try to remember there is tremendous value in that. Sure, you’re busy, and the idea of fasting and having an examiner come to your home may not be the most pleasant thought, but $150+? Not a bad deal, especially if you have not had a routine physical exam or lab work in a while. We’ve seen way too many cases of people discovering a medical condition for the first time on their insurance exam.
No exam life insurance isn’t going anywhere anytime soon. Its popularity is likely to continue growing. But if you find the cost is too high or your options are limited, consider taking an exam and getting the coverage you need at a price you can afford.