Is No Exam Life Insurance Worth It?

If you are planning to purchase a life insurance policy, you should know that insurance companies often want you to be examined by a medical professional before taking out your policy. But if the thought of undergoing a medical exam stresses you out, you can also opt for a no-exam policy that allows you to skip the exam.

Several of CNBC Select’s picks for best life insurance offer no-exam coverage. Mutual of Omaha, one of our top picks for seniors, offers whole life insurance with no medical exam. And a top choice for customer satisfaction, State Farm also offers coverage without a medical exam.

However, you’ll likely pay a price in higher premiums if you opt out of the exam when choosing your life insurance policy. Below, we’ll look at why life insurance companies charge more for no-exam policies and help you decide if it’s worth it for your situation.

Medical examinations are used in insurance, which is the process of deciding how much a person will pay in premiums based on their risk profile. These examinations usually include measuring your height, weight and blood pressure. They also likely include a blood and urine test.

If the exam finds you to be in relatively good health, you will often pay lower premiums because the insurance company sees you as less of a risk. But if you don’t undergo a medical, you’re depriving the company of information it would use to set its prices. “They’re going to assume the worst, they’re going to assume you’re trying to hide some information from them,” says Michael Giusti, senior writer and analyst at Insurancequotes.com. “They will make the policy more expensive.”

People with a medical condition that may disqualify them from a policy will stand to gain the most from this type of insurance. Although a no-exam option will likely offer less coverage than a policy that requires an exam, it’s certainly better than no coverage.

No-exam insurance also appeals to people who feel a medical exam isn’t worth the disruption to their routines and would rather pay the higher premiums. Although exams usually take less than an hour and the medical professional can even come to your home, you may have to skip going to the gym in the morning or fast on the day of the exam. “Time has value, and maybe you just don’t want to take the time to do the assessment,” says Giusti.

Finally, anyone who wants to keep their medical history as private as possible will see the benefit of no exam life insurance. “Maybe you have high blood pressure or cholesterol,” Giusti says. “You might have some reason for not wanting to talk about it, so you’re willing to pay that higher rate.”

There are several types of no-exam life insurance that you will come across when you start shopping for coverage. Some of the types you’ll find include:

• Group life insurance: Your employer may offer life insurance coverage, usually in small amounts equal to a multiple of your salary. However, you may be able to purchase additional coverage through this policy. It will usually end if you quit your job.
• Simplified issuance of life insurance: Instead of taking an exam, you have to answer questions about your health to qualify.
• Guaranteed issue life insurance: No medical information is required and anyone can be approved. However, these policies usually provide a small level of coverage.
• Accelerated life insurance underwriting: A type of life insurance that uses third-party data about your health and habits, such as prescription drug history and driving records, instead of a medical exam.

Life insurance without an exam may make sense for some people, especially if they have health problems, but those in relatively good health will find less expensive coverage with a policy that requires an exam.