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 or Guaranteed Issue Life Insurance Policies, AKA Guaranteed Acceptance Life Insurance, will look like and list some of the major Pros and Cons to these “types” of life insurance products.
Questions that will be answered in this article will include:
- What are 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 Guaranteed Issue Life Insurance Policies?
Guaranteed issue life insurance policies are small life insurance policies (usually $25,000 or less) that can be purchased without taking a medical exam or answering any health-related questions.
Most of these…
Policies will be offered as a cash value whole life insurance policy with a fixed payment (which won’t change during the policy) and a fixed death benefit (which won’t change during the policy).
We should note however…
Some companies do offer “variations” of these types of no health questions life insurance policies that may not last for one’s entire life or provided a fixed payment or death benefit throughout the life of the policy, which is why it’s always important to ask…
- How long will my policy last?
- How much will my policy cost? And can this price ever change?
- How much insurance will my beneficiaries receive? And will this amount ever change?
How does Life Insurance with no health questions work?
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).
Let’s now take a moment and describe what a Graded Death Benefit clause is and why they are necessary for life insurance without health questions to work.
Graded Death Benefit Defined.
A Graded Death Benefit is a clause written into every Guaranteed Issue Life Insurance Policy, which will limit when the policy will begin to cover an insured for NATURAL CAUSES of death.
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?
So, now that we covered the fact that these “types” of no health questions life insurance policies that have a graded death benefit and that they are only going to provide about $25,000 in coverage at a price that is usually more expensive than other “more traditional” types of life insurance, you’re probably asking yourself…
“Why would anyone want to purchase life insurance with no health questions?”
Which is a fair question to ask, so let’s now take a moment and discuss who these “types” of life insurance policies are good for.
Despite some of the problems associated with most Guaranteed Acceptance Life Insurance Policies, they are a good option for some. Especially if you’ve already been declined when applying for a more traditional term or whole life insurance policy.
We should also note that…
Since these “types” of life insurance policies aren’t going to ask any health-related questions, some folks who may be able to qualify for traditional coverage at a “SUBSTANDARD” rate may find the price of a guaranteed issue life insurance policy quite reasonable.
Especially if you currently use tobacco since these types of life insurance policies aren’t going to discriminate against tobacco users!
This is why…
Some people who may be able to qualify for a traditional life insurance policy may still elect for a Guaranteed Issue Life Insurance Policy despite the Graded Death Benefit clause because they feel certain they aren’t going to die of natural causes for the next two years or so and the price for a guaranteed issue policy is actually better than they can qualify for elsewhere.
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!