What Is No-Exam Life Insurance?
When you buy a no-exam life insurance policy, the insurance company agrees to pay a certain amount of money to your loved ones when you die. These funds can help your family members replace your income, pay outstanding debt, and settle other final expenses. Without life insurance, they may struggle to cover the mortgage and household bills, especially if you are the primary earner. In exchange for life insurance coverage, you pay a monthly premium.
When you sign up for a life insurance policy, you must name your beneficiaries. These individuals receive the value of the policy, called the death benefit, if you die with active coverage. A policy that benefits your spouse and children makes sense when you have a family. If you do not have loved ones who depend on your income, you may want a policy to cover funeral expenses.
You can use some life insurance policies to generate income during your lifetime. With these plans, you can invest your premium payments to create growth. Most providers let you take loans against your policy value and/or take tax-advantaged withdrawals from the balance.
Different Types of No-Exam Life Insurance
You can purchase either term or permanent no-exam life insurance. As the names suggest, term insurance lasts only a certain amount of time, while permanent life provides coverage for your lifetime. With term life insurance, your policy has value only until the contract ends. Permanent life insurance policies increase in value indefinitely as long as you pay your monthly premium.
If you choose term life insurance, you can generally select a 10-, 20-, or 30-year policy. You can also consider subtypes of term life. With a convertible policy, you can increase your monthly premium in the future to transition from term to permanent life insurance. A decreasing term life policy offers premiums and coverage that go down over time to coordinate with a large debt such as a mortgage.
Whole life, a type of permanent life insurance, offers guaranteed cash value in exchange for higher premiums. Universal life is a flexible option that allows you to adjust your monthly payments if you need more or less coverage through the years. Indexed and variable universal life policies provide sophisticated investment options to grow the policy value.
Many life insurance policies have optional riders with add-on coverage for special needs. Examples include riders for child life insurance or disability benefits if you cannot work because of an injury or illness.
How Do You Choose the No-Exam Best Life Insurance for You?
First, consider your goals for your policy. You may want to provide for young children or adult children who have special needs. If you own property with a spouse or partner, you may need insurance that will help cover your mortgage and other bills. To quickly estimate your total life insurance needs, multiply your annual salary by 10.
Term policies cost less than permanent life insurance but have a higher possible payout. You might want to opt for term life for peace of mind in the face of large but short-term expenses like paying for your child’s college education. Term life might also fit your needs if you want coverage right away but can’t pay for a permanent policy at the moment.
Besides the choice between a permanent or term policy, many factors affect how much you will pay for life insurance. Most insurance companies require a medical exam and blood test, but some providers – including those on this list – require no medical exam. Life insurance policies typically cost less if you are female, do not smoke, and/or have no chronic health conditions.
Can I have more than one no-exam life insurance policy?
You can purchase as many life insurance policies as you need to meet your financial goals. For example, you may want a policy to cover your family and household expenses and a second policy that pays off small business debts. The plans will remain active as long as you continue to pay your monthly premiums.
What does no-exam life insurance cover?
Life insurance pays the purchased death benefit amount if you die during the policy term. Your beneficiaries can use the funds for any purpose with no restriction. Depending on the policy terms, life insurance covers most causes of death including illness, accident, and natural causes. Most policies also cover death by suicide after a two-year “suicide clause” period at the start of the term.
What doesn’t life insurance cover?
No-exam life insurance will not cover death that occurs during an illegal activity. Most policies do not cover death as a result of a risky activity like skydiving, death by suicide during the initial suicide clause period, or murder by a policy beneficiary. Your policy might have other coverage exclusions and may not provide a payout if you lie on your initial life insurance application.
Can you rely on employer no-exam life insurance?
Many employers offer basic life insurance with no medical exam. It might cover one or two times your salary, much less than the recommended 10-times benchmark. If you are single and have no dependents and little debt, life insurance through your employer may be enough. If you own a home or other assets, live with a partner, or have a family, you probably need more coverage.