Is it possible to purchase Life Insurance without health questions?
Yes, it may be possible to purchase a life insurance policy without answering any health-questions, but not all no health questions life insurance policies are the same.
This is why, we wanted to take a moment and discuss what a no health questions life insurance policy is.
When we are talking about a policy that does not require a health exam or health questions, we are referring to a guaranteed issue policy which is a small whole life insurance policy, typically offering coverage from $5,000 to $25,000, depending on your age.
This article will go into detail about guaranteed issue, AKA guaranteed acceptance life insurance, and answer the most common questions we get.
Questions that will be answered in this article will include:
- What are No Health Questions Guaranteed Issue Life Insurance Policies?
- How do Guaranteed Issue Life Insurance Policies work?
- What are some of the disadvantages of owning a Guaranteed Issue Life Insurance Policy?
- Who should consider purchasing a Guaranteed Issue Life Insurance Policy?
- How can I be sure that I’m purchasing the “right” life insurance policy for me?
So, without further ado, let’s dive right in.
What are No Health Questions Guaranteed Issue Life Insurance Policies?
Guaranteed issue life insurance policies are a type of life insurance that do not require a medical exam or any medical information in order to qualify. These policies are designed for individuals who may not be able to qualify for traditional life insurance due to health issues or other factors.
Guaranteed issue life insurance policies typically have lower death benefits and higher premiums compared to traditional life insurance policies. They may also have a waiting period before the full death benefit is payable, during which time the policyholder will typically not be covered for natural causes of death, suicide and/or accidental overdoses.
It’s important to carefully consider the terms and conditions of a guaranteed issue life insurance policy before purchasing one, as these policies may not provide the same level of coverage as a traditional life insurance policy.
So, if you are in good health and have the option to purchase a traditional life insurance policy, it may be a better choice as it typically provides more comprehensive coverage and more favorable premiums.
How does Life Insurance with no health questions work?
To apply for a guaranteed issue life insurance policy, you typically need to complete a short application and provide basic personal and financial information. The insurer will typically not ask any health-related questions or require a medical exam as part of the application process.
Once you are approved for coverage, the life insurance company will issue a policy and begin collecting premiums. As mentioned before, these types of life insurance policies will contain a waiting period or Graded Death Benefit clause which will limit the death benefit paid out by the policy for the first two or three years (depending on the carrier selected).
Since companies that offer Guaranteed Issue Life Insurance policies aren’t going to be able to learn much (if anything at all) about an applicant’s health before approving their application, it stands to reason that there must be a “catch” in order for these “types” of life insurance no health question policies to exist.
The truth is, there is one. It’s called a Graded Death Benefit, and it’s how life insurance companies can offer individuals a life insurance policy without requiring a medical exam or asking any health questions and remain in business (and be profitable).
Graded Death Benefit Defined.
Graded Death Benefits, are “clauses” written into every guaranteed issue life insurance policy as a way to protect the insurance company for insuring an applicant that is likely to pass away from natural causes shortly after purchasing their life insurance policy.
Each company will have their own unique graded death benefit, however most will follow a similar pattern in that they will limit the amount of death benefit coverage the policy will offer within the first two or three years of the policy.
With a graded death benefit policy, the initial death benefit is typically lower than the full death benefit and increases over a set period of time, typically two to three years. After the waiting period, the full death benefit becomes payable.
This means that…
Most Graded Death Benefits will state within a policy that an insured must live for a certain period of time (typically 2-3 years depending on the carrier) after the policy has been started before the policy will begin to provide coverage for NATURAL CAUSES of death.
By “natural causes,” we’re referring to any cause of death that would be the direct result of some type of disease such as cancer, heart disease, diabetes, etc…
This is how…
Insurance companies can protect themselves from offering Guaranteed Issue Life Insurance Policies to those who are really sick since they won’t have any way of determining this before one is insured since these types of policies don’t require one to take a medical exam or answer any health questions.
“As one can imagine, Graded Death Benefits represent a significant disadvantage of owning a Guaranteed Issue Life Insurance Policy!”
But this is not the only disadvantage one should be aware of.
What are some of the disadvantages of no health questions life insurance?
Aside from the fact that all Guaranteed Issue Life Insurance Policies are going to contain a Graded Death Benefit, it’s important to understand that there are two additional DISADVANTAGES to these “types” of policies you should also be aware of.
The first is that these policies that offer life insurance with no health questions generally don’t offer a lot of coverage.
Most if not all, Guaranteed Issue Life Insurance Policies will be limited to around $25,000 in coverage.
And while it may be possible to purchase several Guaranteed Issue Life Insurance Policies from various insurance companies so that you can obtain more than just $25,000 in coverage, what you’re going to discover rather quickly is that the second major disadvantage of a Guaranteed Issue Life Insurance Policy is their PRICES!
We don’t want to suggest that ALL Guaranteed Issue Life Insurance Policies will be expensive (because they’re not).
All we want to point out is that “dollar for dollar,” these “types” of no health questions life insurance policies tend to be more expensive than other “types” of life insurance policies that do ask health questions or require an exam.
This brings us to our next topic, which is…
Who should consider purchasing a no health questions life insurance policy?
Individuals who may want to consider purchasing a guaranteed issue life insurance policy include those who:
- Have health issues that make it difficult to qualify for traditional life insurance: If you have a pre-existing medical condition or have had difficulty obtaining coverage in the past, a guaranteed issue life insurance policy may be a good option.
- Are unable to afford a traditional life insurance policy: Guaranteed issue life insurance policies may have higher premiums compared to traditional life insurance policies, but they may still be more affordable for some individuals.
Once again, if you are in good health and have the option to purchase a traditional life insurance policy, it may be a better choice as it typically provides more comprehensive coverage and more favorable premiums.
The Top 5 Best No Health Questions Life Insurance Companies
The top 5 best companies offering life insurance with no health questions are:
Please give us a call for complimentary quotes on the above companies.
This brings us to our last topic, which is…
How can I be sure that I’m purchasing the “right” life insurance policy for me?
In our opinion, the key to making sure that you find the right life insurance policy relies on two factors.
First, you need to find a life insurance agent that is going to understand what your needs and goals are. And second, this same agent will need to have access to a wide variety of different insurance products/companies so that they don’t have to apply a…
“One size fits all approach.”
The good news…
Is that because we here at IBUSA chooses to operate as an independent life insurance brokerage with access to dozens of different life insurance companies, including many that won’t ask any health questions, we’ll be able to help you “shop” all of these companies SIMULTANEOUSLY greatly increasing your chances of finding out which one is going to be the “best” for you!
So, what are you waiting for?
Give us a call today, and let us show you what we can do for you!