No medical exam life insurance has one big advantage over traditional life insurance products — time. You don’t need to complete a medical exam, and because of that, you get approved quickly.
However, do the benefits of non medical life insurance outweigh the costs?
In this article, you will learn the pros and cons of no medical life insurance in Canada. And more importantly, whether it is right for you.
What is no medical exam life insurance?
No medical exam life insurance is exactly what it sounds like: a life insurance product that doesn’t require a physical exam to qualify for coverage.
Taking a life insurance medical exam can be a hassle. If you’re fit and healthy, it can seem like a waste of time (though if you're perfectly healthy, you should get the medical component done if possible)
If you have an underlying condition, you may be worrying about how results will affect your premiums.
No medical exam life insurance lets you avoid a medical test. However, this convenience comes at a cost. No-medical policies usually cost more than traditional life.
The insurer will also ask you health-related questions. You must answer these questions truthfully. If the insurer finds out you were dishonest during your application, it can reduce the payout or even deny your claims altogether.
Why does life insurance require a medical exam?
Life insurance companies determine premiums based on life expectancy. The more they know about your health, the more accurately they can set your rates.
A medical test provides your insurer with the best insights into your overall health. It allows them to check for a wide range of illnesses. This, in turn, helps them understand your life expectancy and set your premium rates.
If you are in above-average health, the insurer will reward you with lower rates. However, if the test results don’t come out as expected, you may have to pay higher premiums.
Who should get no medical exam life insurance?
There are different types of no medical exam life insurance policies. Some are for people in good health. Others are for individuals who don’t qualify for traditional life insurance.
The premium rates of no medical exam policies can also vary wildly. Some cost just as much as fully-underwritten life policies. Others are significantly costlier because they are meant for people with underlying medical conditions.
So, whether a no medical exam life policy is right for you depends entirely on your situation. Here are some situations in which you may want to consider a no-exam policy:
- You have an underlying medical condition that disqualifies you from buying traditional life insurance
- You are under 50 and in good health, but don’t have a favourable family history. One thing the insurer wants to know is whether any of your parents or siblings died under the age of 50 from heart disease or cancer. A family history of these events may significantly bump up your rates for a traditional life policy.
- In relatively good health.
- You’re a smoker but are otherwise in good health.
- A senior with pre-existing conditions and looking for a life insurance policy to cover funeral expenses.
- You want to get lif insurance quickly without a medical exam.
Can I get life insurance if I have health concerns or pre-existing conditions?
If you have a pre-existing condition, you might think it would keep you from getting life insurance. But that’s not necessarily the case.
Having health concerns or pre-existing conditions is not the end all be all. You can still buy life insurance. There are many life insurance products designed specifically for Canadians with medical conditions.
However, your health condition will likely affect how much coverage you can buy. You're also likely to receive a higher annual premium rate than someone who’s in better health.
How much life insurance can you get with no medical exam?
Without a medical exam, life insurers cannot accurately assess your risk level. For this reason, no-medical policies tend to have lower payouts than traditional life insurance.
The maximum amount of coverage you can get without a medical test depends on the type of policy you want to buy. It is possible to purchase a no-medical policy with up to $1 million in coverage in Canada.
What types of no medical exam insurance are available in Canada?
Top life insurers offer three types of no medical exam life insurance policies.
- Accelerated issue life insurance
- Guaranteed issue life insurance
- Simplified issue life insurance
What is accelerated issue life insurance?
The average fully-underwritten life insurance policy takes roughly six weeks for approval. Some people do not have the luxury of time when trying to buy life insurance. And if you are in perfect health, you wouldn’t want to pay extra for faster approval.
That’s where accelerated issue life insurance comes into play.
It promises instant approval and is priced similar to traditional life insurance policies.
But the catch is you must be in good health. If you are not, you may have to take a medical exam.
Accelerated underwriting policies use sophisticated algorithms to calculate the risk of insuring you and choosing premium rates. When applying, you will have to answer some health-related questions.
The insurer will enter this information and other data like your driving record, into their algorithm. Depending on the results, you may receive approval without having to take a medical exam. If you don’t, the insurer will request you to complete a medical test.
Guaranteed issue life insurance with no medical exam
Guaranteed issue life insurance provides coverage regardless of your medical history — hence the name. You don’t need to take a medical exam and may or may not answer health questions (depending on the broker). Effectively, it is basically no-questions-asked life insurance.
However, it is significantly more expensive than traditional life insurance and simplified issue whole life. And the coverage amount is rather limited, usually just enough to take care of end-of-life expenses. For this reason, it is also called funeral expense life insurance or burial insurance. Unlike standard whole life policies, guaranteed issue doesn’t include a savings component.
Most guaranteed life insurance policies include a waiting period, usually two years. You need to hold on to your policy for two years before it pays out the death benefit to your family. If you die within this time, the insurer will refund the premium dollars paid into the policy to your family.
Guaranteed life insurance is for people who are seniors or unhealthy or both. If better insurance options may be available, it’s best to talk with your insurance broker first.
Simplified issue life insurance with no medical exam
Simplified issue life insurance offers lifetime protection. But unlike permanent insurance with full medical underwriting, it offers only basic coverage and doesn’t accumulate cash value.
You don’t need to complete a physical exam, but must answer some health-related questions to qualify. Not everybody who applies gets approval. The premium rates are considerably higher than fully underwritten permanent life policies, while the benefit amount is much lower.
Some simplified life policies have a waiting period, usually two years. Your family receives the policy’s proceeds only after the waiting period. If you die within the first two years, the insurer will not issue the payout. Instead, it will pay your family the premium dollars you had paid.
Simplified issue life insurance can be the right choice for people who don’t qualify for traditional life insurance, but are otherwise in reasonably good health.
What is the waiting period for different no medical options?
Some no-medical policies include a waiting period, usually up to two years. These are typically designed for people who have a serious health condition or who are currently undergoing treatment.
Your family will not receive the benefit amount if the claim is filed during the waiting period. However, the insurer is likely to refund premium dollars paid into the before then.
Accelerated issue vs. simplified issue vs. guaranteed issue
Here’s a quick comparison guide.
In the case of simplified issue life insurance, you need to answer health questions to qualify. Plus, the insurers can turn down your application if you are in poor health. On the other hand, guaranteed life insurance doesn’t include medical history questions. The insurer can’t deny coverage, provided you are not above a certain age, usually 85.
Simplified issue life insurance offers more coverage and is cheaper than guaranteed issue life insurance.
Benefits of no medical life insurance
No medical life insurance has a lot going for it, such as:
Life insurance is not like buying a TV. It’s a unique product, and traditional life insurance policies take up to six weeks for approval.
But many people can’t wait that long. They need insurance coverage quickly, due to personal or business reasons. No medical life insurance is an ideal choice for them.
Many insurers approve non-medical policies within 48 hours. Some even approve instantly. That’s extremely beneficial for shoppers that don’t have the luxury of time.
Some need insurance coverage quickly because they’ve got a trip coming up. If you feel uneasy about traveling abroad without it, a no-medical is just what the doctor ordered. You’ll have coverage before your plane takes off!
If you’ve applied for a business loan and need collateral quickly, a no-medical policy can help you secure approval. These loans have tight deadlines, so purchasing a traditional life policy at the last minute is not an option.
Get coverage even with health issues
If you have an underlying health condition and are denied traditional life insurance, all is not lost. You can have another go at it with no medical life insurance companies.
Give simplified issue life insurance a try. You just need to answer some health questions to qualify. However, if you are too unhealthy or too old, guaranteed issue life insurance may be your only option.
Affordable life insurance without a medical test
Looking for affordable coverage without a medical test because you have a fear of needles?
Well, you’re not alone. Up to 20% of the adult population have a needle phobia, according to research. (Yes, that’s a recognized medical condition and not just a fancy term.)
If you’re in good health but don’t want a medical exam, consider an accelerated issue life insurance policy. It only asks you a few questions to prove your eligibility.
And the best part?
The premium rates are similar to life insurance policies with full medical underwriting.
Have a dangerous job
Some jobs — like commercial fishing and underground mining — are riskier than others. The same holds true for hobbies like skydiving and bungee jumping.
If you have a dangerous job or hobby, that may not go down so well with traditional life insurance companies. They are likely to quote you hire rates.
If they do, give no medical life insurance a shot, especially if you are healthy. You may be pleasantly surprised to find how affordable no-medical insurance quotes can be in your case.
It’s no secret the cost of insurance goes up with age. And once you cross 50, the jump is quite steep, roughly 5%-8% a year.
If you are a healthy individual over age 50 and want to buy life insurance to cover funeral expenses, a no medical life insurance policy may be a better option.
The cost difference between a no medical life insurance policy and a traditional life policy for someone with your profile can be pretty narrow. Also, the death benefits offered by most traditional life insurance policies are usually not as low as no-medical policies.
You don’t need a million-dollar insurance policy to cover burial expenses. A policy with a $25,000 or $50,000 payout is likely to prove sufficient. However, there are not many traditional life policies with death benefits in that range. So using no medical exam life insurance to cover burial expenses makes sense.
Disadvantages of no medical life insurance
No medical life insurance policies are not as popular as life insurance policies with full medical underwriting.
Let’s find out why.
No medical life insurance is more expensive
When it comes to affordability, traditional life insurance wins hands down. You need to complete a medical exam to qualify for such a policy. The results of this exam allow the insurer to correctly evaluate your risk and, consequently, set your rates. Your risk level is directly related to how much you pay for coverage.
But in the case of a no-medical policy, the insurer cannot completely assess your risk level. So they’re taking on more risk to cover you. And they compensate for it by raising your premium.
The bottom-line: If cost is your primary concern, opt for a life policy with full medical underwriting.
Lower coverage amounts
No medical exam life policies don’t have the same benefit amounts as traditional life policies. While each insurer is different, there are not many no-medical policies out there with a benefit amount over $5 million.
If you need more coverage, you may be better off buying a fully-underwritten term life policy.
Should I get no medical insurance if I am healthy?
If you need a policy quickly or don’t want to take a medical exam, no exam life insurance is a good option. Accelerated issue life insurance does away with medical exams but keeps the costs reasonable. Young, healthy individuals can easily receive premium rates very similar to that of fully underwritten policies.
Common mistakes when getting no medical life insurance
Far too many people buy a non-medical policy because they are afraid of being turned down. They assume they’re not healthy enough to qualify for traditional life insurance.
But that may not be the case.
You may be healthier than you think. At any rate, how you see your health is not the way an underwriter sees it. So, there’s no harm in giving traditional life insurance a shot.
If you qualify, you get better rates. Not to mention more options. If you don’t make the cut, the door to no medical exam life insurance is always open.
Don’t automatically assume a no medical exam policy is your only option. Try traditional life insurance first instead and keep non-medical life insurance as your plan B.
Is it possible to get no medical whole life insurance?
Yes, it is. No medical exam life insurance policies are available both as whole life and term life insurance. Dundas Life works with some of the leading life insurance companies in Canada. We can help you find the coverage that’s right for you.
How can I buy a no medical life insurance policy?
Shop around as much as possible. Each insurer calculates risk differently. Comparing quotes is the only way to ensure you get the best possible rate. Speak to our insurance advisors at Dundas Life, who will assess your situation and recommend the most suitable non-medical life policy for you. We will also ensure you receive personalized quotes from leading insurers in Canada.
Sample application questions for no medical exam insurance
You may have to answer questions similar to these on a no medical exam life insurance application:
- Has your medication for hypertension or diabetes changed in the past 12 months?
- Have you been treated for angina or heart attack in the past five years?
- Have you ever been diagnosed with cancer?
- Has your driver’s license been revoked, suspended, or canceled in the last 24 months?
- Have you received treatment for drug or alcohol abuse in the last three years?
- Do you weigh more than the maximum weight listed for your height in the given table?
How much does no medical life insurance cost?
How much you’ll have to pay for a non-medical policy depends on the policy type and insurer you select.
For instance, the cost of accelerated issue life insurance is very similar to that of traditionally underwritten policies. On the other hand, both guaranteed and simplified issue life insurance costs way much more.
How much does medically underwriting life insurance cost in comparison?
Underwritten life policies have lower premiums than no medical exam life insurance.
Why is that? Because the insurer knows all that it needs to know to determine how risky you are to insure. That includes your age, health, medical history, family’s medical history, and lifestyle choices. This information helps the insurer to thoroughly evaluate you and offer the best possible rate for the coverage applied by you.
Best no medical life insurance options in Canada
Different types of no medical exam life insurance are suitable for different situations.
If you want: to avoid a physical exam
Consider: Accelerated issue life insurance
Here’s why: This type of no medical exam life insurance doesn’t include a physical and is affordable. You may have to answer a detailed questionnaire, though.
If you want: life insurance coverage quickly
Consider: Accelerated issue life insurance or simplified life insurance
Here’s why: You can receive approval on an accelerated issue life insurance policy within 24 to 72 hours. But if you don’t qualify, you may have to take a medical test, and that will delay things. In that case, you may want to give simplified life insurance a go. Approval is instant or within two days.
If you want: life insurance coverage and are worried about eligibility due to poor health
Consider: Simplified issue life insurance or guaranteed issue life insurance
Here’s why: Your first option should be simplified issue life insurance. It offers coverage for higher amounts and is the cheaper of the two. If you get turned down, shop for guaranteed issue life insurance.
If you want: life insurance to cover funeral expenses
Consider: Guaranteed issue life insurance
Here’s why: This type of no medical exam life policy is available to almost everyone. So you don’t have to worry about getting turned down. Plus, the coverage amount is limited, usually just enough to cover burial or funeral expenses.
Temporary life insurance coverage with no medical exam
Let’s say you realize a fully underwritten life policy fits your needs better. So you apply for one and complete the physical. But the approval can take up to four to six week, meaning you’ll be without coverage during this period. If you feel uneasy about that, opt for a no medical exam temporary insurance policy to fill in the gap.
It will ensure your family receives some benefit if you pass away while awaiting approval.
Funeral insurance coverage option
Life insurance gets more expensive as you age. And once you are over age 50, the premium rates can increase up to 5-8% each year.
But if you are in good health and want to buy a smaller life insurance policy to cover funeral expenses, you should consider a no-med policy. The cost difference between a no medical life insurance policy and a traditional life policy for someone like you is not much. Also, most traditional insurers don’t offer coverage amounts less than $50,000.
So, taking a no medical exam policy to cover final expenses can be a good decision.
Is no medical life insurance worth it?
No medical exam life insurance is a good option for young, healthy people who don’t need a lot of coverage.
Those who don’t qualify for traditional coverage due to underlying health conditions should also consider it. It can be a good way to guarantee approval.
If you need a life policy quickly or don’t want to take a physical exam, opt for no medical exam life insurance. In most other cases, life insurance with full medical underwriting is a better option.