One thing you'll notice if you shop online for insurance or speak
with a broker is that nearly all life insurance policies requires some
form of medical exam in order to qualify. This makes sense; an insurance
underwriter wants to ensure that you'll live long enough to make the
insurance company a profit and collect on their investment, but it can
also be prohibitive.
After all: poor health or illness is
something we can't always foresee, and when it strikes it can have a
debilitating impact on all aspects of your life. Something as simple as
genetics can disqualify you from coverage if you're suffering through a
condition through no fault of your own. Additionally, a major health
scare such as a heart attack or cancer may be what spurs a lot of people
to consider their final affairs and put a plan in place to protect your
family.
These reasons, and many more, have prompted a rise in
what's called "No Medical" insurance. It opens up a new possibility for
those who have, in the past, been ineligible for coverage or have been
difficult to insure. The difference is self-evident: there is no
medical exam to qualify for this life insurance, and coverage is on
terms similar to standard term life insurance policies. Often what is
required is three to twelve medical questions to qualify.
There is
a distinction between No Medical and Guaranteed Issue, which is another
life insurance policy with less prohibitive stipulations. Guaranteed
Issue is life insurance you cannot be denied for, with no medical exam,
but its life insurance that can incur up to 50% to 60% higher premiums
with a much lover coverage ceiling, making it less desirable for those
who don't need it.
However, No Medical life insurance has
gradually become a more reliable option for both individuals and
insurance providers. This is in part due to a greater capacity for care
and greater prognosis for major illnesses. Conditions that normally
prohibit people from seeking insurance are now no longer as risky a
projection for underwriters, and the hassle and time needed to apply for
life insurance is greatly diminished.
There are, however, some
things to keep in mind about No Medical life insurance policies. While
premiums still remain competitive, you still face higher rates than
standard term or permanent insurance due to associated risk. Factors
such as age, gender, and smoking status can raise these premiums even
higher. Yet coverage may still remain within the bounds of what most
people are seeking for their life insurance, some may find the amount of
coverage offered may be lower than most plans.
The greatest thing
lacking in No Medical life insurance is flexibility. Some providers
have made it their business to diversify a line of No Medical Insurance
products. Most, however, offer limited flexibility which can take the
form of permanent-only plans, more stringent age restrictions, or a lack
of available options normally offered through whole policies. This can
limit planning for the future by giving less flexibility, essentially
selecting an insurance plan by compromise.
It can seems like No
Medical insurance is settling for less, and in a lot of ways it is. As
an insurance option, it certainly offers less than a conventional
policy. However for many, it may be the best option or even the only
option due to past health concerns. And sometimes the most important
factor in your coverage is that you can get it in the first place.
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