In this article, we want to take a moment and discuss some of the differences you’ll find between life insurance policies that will require you to take a medical exam vs. those that won’t. And since we here at IBUSA offer both “types” of life insurance policies, our goal isn’t going to be to try and “sell” you on one type or another.
Instead…
We’re going to focus on how each of these “types” of life insurance policies will benefit specific individuals differently. This way at the end of this article, you should have a better understanding of how these two “types” of insurance policies work and which one might be “best” for you.
Questions that we will address in this article will include:
- Why do some life insurance policies require a medical exam while others don’t?
- If I don’t take an exam, are there other ways an insurance company can learn about my “health?”
- Are No Medical Exam Life Insurance policies as good as those that require one to take a medical exam?
- Why would anyone want to take a medical exam if they didn’t have to?
- What can I do to help ensure that I get the “best life insurance” for me?
Before we do a deep dive, let’s summarize the main points we will address in this article.
Point 1: Sometimes, taking the life insurance paramedical exam makes sense. For example, if you are a well controlled diabetic and you want to show the insurance company, take the exam and demonstrate how well your blood glucose levels are maintained. This could benefit you by having the underwriter award you with a better health rating.
Point 2: If you are generally healthy, you might want to avoid taking the exam and instead choose life insurance with no medical exam. That way, if you are not as healthy as you think you are, it won’t show up on your paramedical exam. Instead, the insurance company will use available data to determine your health rating rather than the more traditional way of looking at your life insurance medical exam results.
Point 3: In the past, taking an exam would save you a good deal of money on your life insurance premium. However, due to innovative underwriting approaches, called “accelerated underwriting,” many of the best life insurance companies in the U.S. no longer require an exam for the majority of applicants. Therefore, if you apply with the right company, you don’t have to take an exam anyway.
So, with that intro aside, let’s take a deep dive into the world of life insurance with an exam vs no exam life insurance.
Why do some life insurance policies require someone to take a medical exam while others don’t?
Historically, most of the best life insurance companies would require all applicants to take a medical exam when they were applying for a “larger” term or whole life insurance policy (i.e., greater than $50,000 in coverage). The main reason for this was because a medical exam would provide an insurance company the opportunity to have an examiner meet the proposed insure, as well as give an insurance company a lot of useful information about the applicant.
And…
This is still why a lot of life insurance companies are going to require a medical exam for an applicant to qualify for its insurance products. After all, a short paramedical exam conducted within your home or office, which will require a urine sample and a blood draw, will reveal a lot about an individual.
For example…
A paramedical exam will provide a life insurance company with your current:
- Height and weight,
- Blood pressure levels,
- Cholesterol levels,
- Blood sugar levels (if elevated, could be a sign of Diabetes),
- Presence of any liver enzymes in one blood (indicative of possible liver disease),
- The presence of proteins in one’s urine (indicative of possible kidney disease),
- Presence of any nicotine (indicative of some type of tobacco use),
- The presence of any marijuana,
- The presence of alcohol biomarkers indicative of long-term alcohol abuse,
- Presence of any illicit drugs within one’s blood or urine sample.
All of which can have a serious effect on whether or not someone may be able to qualify for a term or whole life insurance policy.
The only problem is…
These tests can be quite expensive for an insurance company. Seeing how it is the insurance company that must pay for these tests, it’s understandable why some insurance companies will be open to pursuing less expensive alternatives to gathering this kind of information elsewhere.
Which is wh over the years, some insurance companies have become very good at determining who they will and won’t insure without having to rely on a traditional medical exam approach. Instead, some insurance companies have learned that with the expansion of “big data” into all of our lives, underwriters can learn a lot about an individual’s health without actually having to make an insurance applicant pee in a cup or provide a blood sample.
What are some ways an insurance company can learn about your health without requiring an exam?
Let’s take a moment and review some of the most common ways that an insurance company can learn about you and your current health status without actually requiring you to take a medical exam.
The application interview.
The first way that a life insurance company is going to learn more about you is by having you complete an application interview. An interview that will ask you a series of questions designed to learn about what kind of risk you may pose to them.
These application questions may include:
- What is your current height and weight?
- Are you currently working right now?
- Have you ever been diagnosed with cancer, heart disease, or Diabetes?
- Have you ever suffered from a heart attack or stroke?
- Have any of your immediate family members ever been diagnosed with cancer, heart disease, or Diabetes?
- In the past 12 months, have you used any tobacco or nicotine products?
- Do you have any history of drug or alcohol abuse problems?
- In the past 12 months, have you used any marijuana products?
- Do you have any issues with your driving record?
- Do you have any set plans to travel outside of the United States in the next 12 months?
- In the past two years, have you filed for bankruptcy?
- Have you ever been convicted of a felony or misdemeanor?
- In the past 12 months, have you applied for any form of disability benefits?
From here, the insurance companies will have a “general” idea about how healthy an individual is based on whether or not an individual is currently working, holds a valid driver’s license, and has or hasn’t applied for any form of disability benefits.
They’ll then want to begin collecting information about you that can be obtained by a variety of different databases which can help support the answers you gave to them on the life insurance application.
A Prescription Database Check
One of the first databases that a life insurance company is going to look at will be a prescription medication report because this will provide them with precious information about your current health. After all, when an individual is diagnosed with a medical condition, one of the first things that is going to happen is that they will be prescribed some type of medication. Which when you think about it, is a lot more useful than having an applicant take a medical exam.
For example…
If an insurance company orders your prescription database records and sees you’re taking Metformin (a common medication for type 2 diabetes) and/or Simvastatin (a common cholesterol lowering medication) do they really need to perform a medical exam of their own to know that you have Diabetes and/or high cholesterol?
No, probably not.
Instead, they can use this information to learn that you have been diagnosed with these two conditions and “work backwards”. By this we mean that not only will the insurance company be able to see that you have Diabetes and high cholesterol, but they can also now determine the following:
- When you were diagnosed with these two conditions (based on when you were prescribed these medications).
- How well these medications are working:
- Has your doctor changed your prescriptions over time?
- Have the dosages increased or decreased?
- Have new medications been added or subtracted to your treatment program?
- And how frequently you visit your primary care physician to refill your prescriptions.
From there, an insurance company can decide if they need more information from you, such as requesting medical records from your doctor.
Medical Records
Regardless of whether or not you choose to apply for a life insurance policy that will or won’t require a medical exam, some life companies will decide that they want to review your medical records before they make any decision about your application. And it’s important to note that having one’s medical records is not necessarily a “bad thing”. In fact, sometimes, requesting one’s medical records is just standard procedure and isn’t something someone should be worried about.
For example…
Some insurance companies will automatically order an individual’s medical record if they’re over the age of 60 or if they’re applying for a large life insurance policy due to the potential exposure the insurance company would face in such a situation.
The good news is that when these records are ordered, they will generally provide the insurance company with a better overall understanding of your current health status, which means that if you’re in good health now. Also, if there were any questions in the insurance underwriter’s mind that perhaps they shouldn’t offer you a policy, these medical records could possibly help you out.
DMV Report
A DMV report will allow a life insurance company to see whether or not you have speeding tickets or accidents on your record as well as let them know if you have ever been arrested for a DUI. It will also let them know if you have any driving “restrictions” or if you have ever had your driver’s license suspended for any reason. All of which could play a role in the outcome of your life insurance application.
Criminal Background Report
A criminal background report will allow a life insurance company to see if you have ever been convicted of any previous felonies or misdemeanors. Which can provide a lot of useful information with regards to “risky” it may be for them to provide coverage to you. This can be particularly useful to a life insurance company when a client reports that they don’t have a history of drug or alcohol abuse but have been arrested or cited multiple times for possession or public intoxication.
Credit Check
Insurance companies will often time request that a credit check to be performed on an individual. While it may not seem immediately clear how this will help a life insurance company learn about your current health status, we should note that unexpected medical costs are responsible for a lot of bankruptcies in the US. So it’s understandable why they sometimes like to have access to this information.
As you can see…
Even though a life insurance company may not require an individual to take a medical exam, it’s going to have plenty of information available about you to help its underwriters make their decision.
This brings us to our next topic, which is…
Are No Medical Exam Life Insurance policies as good as those that require one to take a medical exam?
Simply put, a life insurance policy is only as good as the company issuing the policy. This means that if you are purchasing a No Medical Exam from a highly rated life insurance company, that policy will be just as good as any Fully Underwritten (exam required) life insurance policy provided by that same life insurance company. This then leads us to the obvious question and our next topic, which is…
Why would anyone want to take a medical exam if they didn’t have to?
Years ago, this used to be a much easier question to answer because back then, no medical exam life insurance policies cost significantly more (percentage-wise) than traditional life insurance policies, which would require one to take a medical exam. While it’s true that No Medical Exam Life Insurance policies may still cost a bit more than traditional life insurance policies do, this difference (if any) is now so small that someone should at least consider purchasing a No Medical Exam life insurance policy vs one requiring an exam.
Particularly if…
The applicant doesn’t currently have any life insurance in place and/or hasn’t seen their primary care physician within the past two years. This is because, while it is true that there are a lot of ways a life insurance company can learn about your current health status without requiring you to take a medical exam, most of those “ways” will require that you have been previously diagnosed with some disease.
So…
If you believe that you are healthy and don’t suffer from any kind of pre-existing medical conditions but haven’t visited your primary care physician in several years, or haven’t had a complete physical in a while, it may not be in your best interest to apply for a no medical exam life insurance policy vs taking an exam.
This is because, there is always a chance you’re medical exam could point out that you may suffer from:
- High blood pressure,
- High cholesterol,
- Elevated blood sugar,
- High PSA levels
Conditions that are all quite common, particularly in folks entering into their mid-40s and early 50s.
And even though…
Most of these conditions are “insurable,” what we can tell you is that the life insurance rates that you would probably pay for a No Medical Exam Life insurance policy before any one of these conditions was diagnosed will probably be lower than the life insurance rate you would have to pay if you had already been diagnosed with one of these “types” of pre-existing medical conditions.
When It Makes Sense to Take The Life Insurance Medical Exam
But here’s where things can get a bit interesting because while it’s true that an individual may benefit from applying for a No Medical Exam Life Insurance Policy if they haven’t been previously diagnosed with any kind of pre-existing condition in the past, the same isn’t always true for those who HAVE been diagnosed with a pre-existing medical condition.
This is because…
In situations like these, it’s often helpful for an individual to take a medical exam so that they can provide further evidence to an insurance company that they are in good health.
In other words, if you have a pre-existing health condition, the exam gives you an opportunity to demonstrate to the underwriter how well controlled your condition is.
And this is why…
We’ll often advise clients who have been diagnosed with a pre-existing medical condition to avoid applying for a No Medical Exam Life Insurance Policy because these “types” of life insurance policies can often prove more difficult to qualify for, especially for those with “health complications.” Which bring us to the last topic that we wanted to take a moment and discus with you which is…
What can I do to help ensure that I get the “best life insurance” for me?
In our experience here at IBUSA, we have found that usually, the folks who seem to find the “best” life insurance policy for them are those that:
- Take their time reviewing their options.
- Ask a lot of questions.
And seek out those life insurance agents who not only have experience working with individuals who have been diagnosed with a wide variety of pre-existing medical conditions but also have access to dozens of different life insurance companies so that when it comes time to help a more “challenging” case, they don’t have to rely on a…
“One size fits all approach!”
And there you have it, our take on how traditional term or whole life insurance policies will differ from many of the No Medical Exam term or whole life insurance policies that are in the market right now. Hopefully, we’ve been able to describe these two “types” of life insurance policies in a way that helps you get a better idea about which “kind” may or may not be best for you. As well as provide you with a general idea about how we here at IBUSA like to help our clients.
You see our goal here at IBUSA isn’t to try and “sell” you a life insurance policy. Instead, our goal is to help you find the “best” life insurance policy that you can qualify for!
