The Myth of No Medical Exam Life Insurance

UPDATED: Mar 26, 2020

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We live in a fast-paced world. Internet access and mobile technology have made immediate gratification the new standard. Social media allows us to follow news and world events in real-time, stay in touch with family and friends and publish our thoughts and experiences with the touch of a screen. Online shopping and next-day shipping are expected, demanded even.

We’ve come to expect things to happen quickly and on our terms. And the term life insurance industry has taken notice.

Many companies have developed new term life insurance policies to fit the demands of today’s consumer. They are designed to move applications through the long, traditional process quicker. The goal is to reduce processing time and get a new policy into your hands sooner.

These new policies go by a variety of names like no-medical exam life insurance, simplified issue life insurance, accelerated underwriting life insurance, and others. For simplicity, we’ll just call them accelerated underwriting life insurance as that’s the common end goal.

As a group, these products have the same basic goal of speeding up the process. Individually, they attempt to do this in different ways. It’s important for you to understand these difference so your expectations are realistic and you don’t end up frustrated with a process that’s not what you thought it was.

Types of Accelerated Underwriting Products

  • No Medical Exam Life Insurance

    The name says it all. With no medical exam term life, you are not required to complete a paramed exam to apply for a policy. From there, the process can vary from completely online/electronic, to a telephone interview, to a paper application. Because of these differences, the process can range from as little as one day to several weeks. So, although you will not need an exam, you may still have a long process on your hands.

  • Simplified Issue

    Products with a simplified underwriting process often have requirements removed from the traditional underwriting process. One of those may be the paramed exam. Some companies will require them and others will not. Medical record review is another requirement that companies may remove. Eliminating the need for medical records can save weeks, even months, from the application process.

  • Accelerated Underwriting

    Speed is the primary focus of accelerated underwriting. Companies typically do not remove underwriting requirements from the process to speed it up. Instead, they may create dedicated teams or internal processes that move applications along faster. These teams may have a smaller case load to work with, or they may only process applications with fewer requirements. Companies may also screen applications initially and assign some to the accelerated teams and others to the traditional groups.

The Truth About Accelerated Underwriting

We should clarify some myths, or misconceptions, about accelerated term life insurance products.

  • Myth – You will not need to complete a paramed exam.
  • Reality – This is not always true. You may not have to take an exam initially to apply. However, if you don’t qualify due to medical history or something else, the company may move your application to a more traditional process and ask you to complete an exam.
  • Myth – Term life insurance without an exam is easier to qualify for. After all, no exam, right?
  • Reality – Quite the opposite is true. No medical exam policies are harder to qualify for. The underwriting guidelines are stringent because the company is limited in what it can review. For example, the application may ask if you have high blood pressure, but the company cannot see how high it is without an exam. Or you may have diabetes, but the company cannot confirm your current A1C level. These restrictions force the company to be more strict with its underwriting.
  • Myth – Accelerated means I will get my policy faster.
  • Reality – This is always the goal and only sometimes the case. Even though your application is on a faster track, there’s always the chance something could derail it. For example, an item on your motor vehicle report may require additional review, including a written explanation from you. Or, a previous application with another company may appear on your MIB report showing recent tobacco use. This could force the company to order medical records from your doctor and require you to submit a urine sample.
  • Myth – All no-medical exam life insurance policies are the same.
  • Reality – Life insurance companies put limitations on these policies. Restrictions include:
    • Coverage amount – This can range from a minimum of $25,000 to a maximum of $1,000,000. Most companies max out around $500,000.
    • Term length – Policies are available for 10 – 30 years, but some companies only offer up to 20-year policies.
    • Age – Most policies are only available to applicants age 65 and younger. A limited number of policies in smaller amounts are available for older applicants.
    • Rating Class – Some companies make these policies available only for people who qualify for the best rating class. This means if you have a medical condition, family history, or anything else that disqualifies you from the Ultra-Preferred class, you won’t qualify and will have to go through full underwriting.
  • Myth – The cost is the same.
  • Reality – In general, no medical exam policies cost more. Companies often charge more because they take on greater risk with these policies. But sometimes the difference is small. Make sure you review your quotes closely.

Tips for Choosing a Policy

  1. Figure out what’s most important to you. Is it speed? Convenience? Cost? Are you willing to sit for an exam if it will save you money? Or would you rather skip it, even if it will cost you more?
  2. Once you know what you want, find a company that offers it. Look closely at the product descriptions and talk with one of their representatives, if you can.
  3. Be realistic. You’ve done your homework, and you know what to expect. There shouldn’t be any surprises, but if there are, work with your agent or company representative to keep your application moving along.

Simplified underwriting policies are here to stay. Although these policies are new, life insurance companies will continue to figure out what works best and how to price it so you will buy it and they will make money. Expect to see new offerings roll out periodically and, if they are consumer-friendly and competitively priced, we’ll add them to our website. Because a faster, easier process is good for all of us.


Tim Bain

Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites. You can find him on Twitter.

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