Life Insurance Requiring No Health Exam: Possible Disadvantages

When shopping around for policies, many look for life insurance with no health exam. There are numerous companies that will offer this type of insurance. The policies are typically only term insurance, and may have some disadvantages over one that requires a health exam.  

Potential Disadvantages of Non-Exam Life Insurance

For some, finding the time to have a health exam for the sake of insurance is a burden due to scheduling. A series of questions are offered instead and must be answered truthfully in order to obtain coverage. There are some disadvantages associated with applying for life insurance with no health exam.

  • The premiums may be higher than a policy where the health exam is required.
  • Those with preexisting conditions are not encouraged to apply, as the insurer will be unable to determine the extent of the condition strictly through questions, and will most likely turn down the applicant. If an illness is concealed, the policy can be terminated and would exempt the benefactors from receiving any benefit.
  • Term life insurance with no exam packages provides benefits only when the policy holder dies within a specified term. If that person lives longer, then no benefit is provided.
  • Beneficiaries may only receive a reduced benefit, or in some cases nothing at all if the insured passes away within the first 2 years of the policy’s coverage.
  • If the insured dies of natural causes within a specified term, the policy may pay a lower amount or none at all.
  • Another potential modification used for life insurance with no exam is one that only covers accidental death from car accidents or falls, and not health related issues such as heart attacks or strokes. Some will not cover death related to extreme activities such as sky diving or downhill skiing.
  • Some policies with no health exam will only cover up to a certain amount. If the insurer wants higher benefits, then the price of the policy sky rockets.
  • Most life insurance no health exam policies have a “contestable” period of 1 or 2 years, where they can modify or cancel the policy at any time if they believe the applicant left out relevant information.
Most of these policies are ones sold over the internet, where applicants can answer questions privately. While there types of policies may be beneficial to many people, it is important to know the risks previously discussed. Because the policies are more expensive, it may be worth it to some that do not want the hassle of the health exam. Being open and honest when answering the questions is the key to a successful policy.

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