One good side effect of the COVID-19 pandemic is that life insurance with no medical exams are becoming more popular. Many clients prefer no medical exams since the process is faster and also generally there aren’t any needle pokes for blood work, etc. (Unless in some rare exceptions where red flag pops up in your answers to the medical questions on the application. Then the insurance company may want a medical exam at that point, but you would have a choice to continue at that stage or decline to move forward.)
There are different types of "No Medical Exam” life insurance. Accelerated underwriting is one type and more than a third of life insurers have expanded accelerated writing due to the pandemic. However, just like the pros of being faster and easier, there are also some disadvantages. Some of the disadvantages are that you lose flexibility and generally pay a higher premium. With accelerated underwriting, rather than go through the traditional more lengthy approval process with a medical exam that would include blood work and urine samples, the insurance company would still require a completed application which includes asking medical questions and history. Also the insurance company uses big data and generally will check things like:
- Your prescription drug history
- Data from the MIB (an information sharing service for insurers)
- Credit history
- Driver record
- and even shopping habits!
Keep in mind that approvals are not guaranteed but are generally faster to get an answer.
The another type of no exam life insurance is called simplified issue which considers the answers on your application and doesn’t really tap into big data.
The reason these type policies typically cost more and offer less coverage than standard traditional life insurance policies is that they rely on limited information which is more risk for the insurance companies. The more the risk for the insurance company, the more expensive the premium is for the client.
To read their entire article click on the web link below:
https://www.nerdwallet.com/article/insurance/covid-19-accelerates-no-exam-trend-in-life-insurance
Source: NerdWallet article by Georgia Rose
https://www.nerdwallet.com/article/insurance/covid-19-accelerates-no-exam-trend-in-life-insurance
Note: Life Insurance information can be confusing to many people. As an "independent licensed agent" I can explain things to you in simple terms so you feel comfortable making a decision. Then I can help you choose a life insurance policy, from many choices of different insurance companies, that you feel fits your needs. Plus if you choose to work with me you will have personalized service by a local agent that can shop premium quotes for you. If you would like my assistance to discuss and/or start the process of getting you insured please call me at 941-404-5334.