It’s not all that uncommon for someone to go years and years without life insurance, then suddenly decide it time to get insured, and it’s time to get insured now! Like instantly!
The good news is…
Unlike the past, where just about every term and whole life insurance policy available would require someone to first meet with a licensed insurance agent, then complete a written application and finally take a medical exam, while waiting weeks for a decision,
Many insurance companies…
Now have a no medical exam life insurance policy option, which will allow many folks to get insured “instantly” or at least within 24 to 48 hours (which in the world of life insurance is about as instant as one gets).
The best part about these “types” of life insurance policies is that unlike the no medical exam life insurance policies or guaranteed issue life insurance policies from the past (which have traditionally focused on covering one’s burial costs), these newer types of life insurance policies may provide some significant coverage!
In fact, some may even provide $1,000,000 term life insurance coverage or more!
“Which is great!”
Just because instant life insurance policies are available doesn’t necessarily mean that these types of life insurance policies are the best option for everyone.
This is why we wanted to take a moment and discuss some of the pros and cons of instant life insurance policies and provide a few examples where they may or may not be one’s best option.
Questions that will be addressed in this article on instant issue life insurance will include:
- What is an instant life insurance policy and how does it work?
- When should an instant life insurance policy be considered?
- When should someone avoid applying for instant life insurance?
- What can I do to improve my chances of qualifying for the “best” life insurance policy for me?
So, let’s get to it!
What is an instant life insurance policy and how does it work?
The first thing that we want to make clear is that there really isn’t such a thing as an “instant life insurance policy.”
Instead, when the top life insurance companies and or agents refer to instant coverage, what they’re usually talking about “accelerated underwriting.”
These are life insurance policies that won’t require applicants to take a medical exam. Instead, the insurance company will rely on other sources of information and your application to determining your eligibility for coverage and at what health rating you qualify for.
These “other sources” underwriters consider will typically include:
Prescription database check.
A prescription database check will include a list of all of the prescription medications you have received from your current and previous doctors. By having access to this type of information, insurance companies can learn a lot about what “kinds” of pre-existing medical conditions you may have or have had without actually performing a medical exam.
With a motor vehicles report, insurance companies will be looking for moving violations and any DUI’s in addition to any license suspensions regardless of cause. In fact, many (if not most) life insurance companies will use a suspended license as a reason to deny an application even if the suspension is due to a non-moving violation (unpaid parking tickets) or even a non-driving issue such as failure to pay child support.
Criminal background check.
Previous felony or misdemeanor convictions can and often will affect the outcome of one’s life insurance application and in some cases, may prevent someone from being able to qualify for coverage at all.
Some life insurance companies will use one’s credit report as a way to screen for medical bills and recent bankruptcies, which could play a role in whether or not someone will be able to qualify for cover with “certain” life insurance companies.
Medical Information Bureau or MIB Report.
A MIB report is an internal report that insurance companies have and share among themselves, which will provide information to one another with regards to whether or not you have ever applied for coverage with another company. These reports will only share limited data.
However, this data can be quite useful, particularly if it shows that you’ve recently been denied coverage for some reason, or that you’ve recently tested positive for tobacco or marijuana, but on your current application, you’re denying using either of these products.
As you can see, even though an “instant” life insurance policy might not require one to take a medical exam, it will still do a pretty thorough job of determining whether or not someone has any “issues” that they (the insurance company) might be worried about.
This brings us to our next question, which is…
When should an instant life insurance policy be considered?
Here at IBUSA, we like to recommend these types of life insurance products to relatively young and healthy individuals and who currently don’t have any life insurance in place.
We do so because clients like these will usually be able to quickly qualify for these types of instant issue life insurance policies.
They avoid the possibility of being “diagnosed” while applying for a traditional life insurance policy, which is why you should consider no exam life insurance versus taking an exam if you have not had a medical check up in awhile.
There are many people in the United States today who believe they are in great shape but haven’t really put this belief to the test.
Which means that when they do decide to apply for a traditional life insurance policy that will require them to take a medical exam, all of a sudden, we discover that our perfectly healthy patient actually has:
As one can imagine, it is not only going to change what price they may have to pay for their coverage, it could also prevent them from being able to qualify for coverage at all!
This is why…
We here at IBUSA will often recommend a no medical exam life insurance policy first. If you’re not 100% satisfied with that policy, apply for a more thorough traditional life insurance application, which will require a medical exam, BUT while you are fully insured.
Having said that…
When should someone avoid applying for an instant issue life insurance policy?
OK, so now that we understand who SHOULD apply for an instant or simplified issue life insurance policy, let’s now take a moment and discuss who SHOULDN’T apply for one of these types of life insurance policies.
While these “types” of life insurance policies are good for relatively young and healthy applicants, as one gets older or acquires a few pre-existing medical conditions, these “types” of life insurance policies will tend to become more difficult to qualify for.
Now this “increased difficulty” shouldn’t be viewed as a reflection of the “older” or “sicker” applicant.
This is just a natural reaction that the insurance company(s) will have because “instant” life insurance policies will undoubtedly have less information and less time to make their decision about your application.
And as a result, these “types” of life insurance policies will tend to be more difficult for less than “perfect” applicants to qualify because the insurance companies will be more strict!
This is why…
When we speak with an older applicant (60 years and above) or one with multiple or serious pre-existing medical conditions, we’ll often recommend AVOIDING an instant issue life insurance policy.
Instead, the best route is often opting for an application that will provide an insurance company with more information about your health and enough time to order medical records from your primary care physician if they feel that those would help them in determining whether or not you would be an acceptable risk to them.
The good news is…
That we here at IBUSA work with dozens of different life insurance companies that offer both “types” of life insurance policies, both exam and no exam, so regardless of what your situation is, we should have an option that you can choose from.
This brings us to the last topic that we wanted to discuss here today, which is…
What can I do to improve my chances of qualifying for the “best” life insurance policy for me?
In our opinion, there are two things that one must do to increase their chances of being able to qualify the “best” possible instant life insurance policy for you and your family is to first, make sure that you choose a life insurance agent that is able to “shop” your options for you and second, make sure that you fully understand why one particular life insurance company is “best” for you BEFORE you apply for coverage.
Not only will you be sure that you’re getting a good deal, but you’ll also have a much better chance of avoiding any long delays when it comes to actually getting insured!