What is no-exam life insurance?
No-exam term life insurance is a less-invasive way of purchasing term life insurance without the hassle of a medical exam. Life insurance is something that you need to qualify for in order to purchase. Traditional life insurance underwriting would require a physical exam and a person’s medical records in order for the insurance company to make an offer.
The traditional underwriting method proved unpopular due to its invasiveness and lengthy process (the average fully-underwritten life insurance application can take 4-6 weeks to be approved). As a result, we would see people get frustrated and fall out of the process in the middle of underwriting. Approximately, one out of three applications would never make it to an in force policy.
No-exam term life insurance companies have developed ways to streamline the underwriting for qualified applicants by eliminating the need for a medical exam. These innovations have allowed no-exam term life insurance companies to issue policies within 7 days and sometimes, within minutes! This has resulted in more people getting covered and overall higher customer satisfaction.
How does no-exam life insurance work?
Sometimes, our agency will field phone calls from people with pre-existing medical conditions who think that no-exam term life insurance is easier to qualify for than fully-underwritten term. Don’t be fooled, no-exam term life insurance, while offering a streamlined less-invasive underwriting, is not guaranteed.
You need to generally be in fair or excellent health to qualify for no-exam term life insurance. If you have or had been diagnosed with a high-risk medical impairment, no-exam term life insurance might not be the best option for you. If you are unsure if your health history will disqualify you from purchasing no-exam term life insurance, request a no-obligation quote from one of our veteran agents. They will go over all of your options
The best no-exam life insurance companies will often use the following methods to determine if you qualify for life insurance without a medical exam:
- Prescriptions database check
- Third-party data searches
- Medical Information Bureau (MIB) check
- Motor Vehicle Records (MVR) check
- Health questions on the application
Prescriptions Database Check
The no-exam life insurance company will not have any recent lab work or medical records to verify that you are in good health. As a result, they will use whatever information they can quickly and easily obtain to paint a picture of your overall health. The underwriter will not only look at the medications you are currently taking but any medications that you were prescribe anywhere from 5-10 years ago!
This is where lack of context can hurt you in qualifying for no-exam term life insurance. If you were prescribed a medication in the past that would give the life insurance company concern, even if you didn’t take it, the underwriter will be conservative and decline you for no-exam coverage.
We see this happen from time to time when doctors prescribe medications “off label.” For example, we had a client declined for no-exam life insurance because he was prescribed a breast cancer medication to regulate his estrogen levels during testosterone therapy. This treatment on its merits is not usually too concerning, but the life insurance company declined him since they had no way of verifying that he did not have breast cancer.
Our advice is be as forthcoming and truthful as possible on your application. We understand that it can be hard to remember every medication that you were ever prescribed in the last 10 years. However, life insurance companies hate surprises in our experience. An underwriter is likely to be more understanding if you declare your health history in great detail on the application instead of uncovering it during the underwriting process.
Below are some medications that no-exam life insurance companies will be concerned about:
- Opioid painkillers: With the recent headlines the opioid epidemic has received, no-exam life insurance companies have tightened their underwriting around pain medications. If you were prescribed pain medication, such as Oxycodone, Hydrocodone, or Methadone, in the past 5 years, this could potentially affect your no-exam life insurance rates.
- Blood thinners: Prescription blood thinners like Coumadin, Warfarin, and Eliquis are also a red flag for no-exam life insurance companies. These blood thinners can indicate coronary artery disease. If you are on these types of medications, it would be best to go fully-underwritten for term life insurance.
- Mood disorder medications: No-exam companies are extremely conservative with depression, anxiety, bipolar disorder, schizophrenia, etc. Certain stronger mood medications, such as Abilify, will automatically disqualify you for no-exam term life insurance. If the underwriter sees that you are taking multiple mood medications or your medications are constantly changing, that can imply that your condition is more severe case or uncontrolled. Since the life insurance company has no additional information, they may conservatively decline your application.
- Dementia medications: Most no-exam life insurance companies will not offer coverage to people with dementia or alzheimer’s disease. If you are taking or have taken medications like Exelon or Namenda, the life insurance company will most likely decline you for no-exam term life insurance coverage. In our experience, guaranteed issue life insurance is your best option here.
Third-party Data Searches
It is amazing the amount of public information about our lives that is available in the information age. Third-party data collectors, like LexisNexis, have not only compiled a ton of information about our spending habits, credit history and debts, how often we have moved, driving history, etc., but they have also have found a way to infer our lifespan from this information through an algorithmic risk score.
We have started to see people who would otherwise qualify for top no-exam rates approved at higher rates than expected. Some life insurance companies have used risk scores to disqualify applicants for no-exam underwriting altogether; although, this is rare.
If your risk score disqualifies you, some no-exam life insurance companies have decided to give you the option of taking an exam in order to get approved. As a result, a middle option known as accelerated underwriting has begun to grow in adoption by the life insurance companies in recent years.
Unfortunately, it is virtually impossible to predict the effect of your risk score on your no-exam application. The score is not posted publicly; although, you can request your information from the data gatherer. Even if you knew your score, the life insurance companies are constantly changing how they incorporate the risk score into their underwriting making it very challenging to field underwrite.
Medical Information Bureau (MIB) Check
The medical information bureau is a non-profit organization that stores the results from any life insurance application you have taken from its member organizations. If you have taken a life insurance application in the past from a major life insurance company, the results are most likely documented here. As a result, no-exam companies will check the MIB for anything that may stand out as a conflict with your current no–exam application.
Common conflicts that we see come up are discrepancies in build, smoker rates issued in the past but applicants declare themselves as a non-smoker and former declines of coverage. A conflict in the MIB won’t necessarily decline you outright, but the agent may contact you to clarify follow-up questions from the underwriter. Again, underwriters hate surprises so it is best to fully disclose as much as you can on the application.
Motor Vehicle Record Check
The life insurance company will run your MVR to see if there is anything on your driving record. The life insurance companies understand that no one is perfect. One speeding ticket will not typically be a problem. However, a pattern of risky driving behavior can be.
Also, underwriters will be concerned about DUIs/DWIs. If you have had a DUI or DWI within the past 5 years, that could have an impact on your no-exam term life insurance application. Additionally, if you have a history of multiple DUIs or DWIs, that can also be concerning regardless of how long ago they were.
Certain life insurance companies are more lenient with driving history then others. If you have a DUI or DWI on your record, you should work with a knowledgeable agent who can broker multiple companies. They will be able to match you with the best no-exam life insurance companies for your personal situation.
Health Questions on the Application:
Finally, the life insurance company will ask thorough questions about your health and lifestyle on the application. If there is one thing that no-exam life insurance companies hate, it is being surprised. We cannot stress this enough.
If you answer no to a health question and your background checks provide information that would contradict your answers, the life insurance company will err on the side of caution. If they have any doubt at all, they will most likely decline you for no-exam coverage. Therefore, it is important to provide as accurate of information as possible on your application.
Our agency likes to add as much context within the application itself for anything that might appear on your background checks. If you had a surgery 4 years ago and were prescribed pain medications once, we should note that on the application. If you had a complex lifestyle impairment, such as a bankruptcy or felony, we’ll write the underwriter a cover letter describing the details and presenting your case in the best possible light.
By providing context, it allows the underwriter to feel more comfortable about approving your risk. Since the underwriter is working with limited information, it is best to give them the information they need to say yes.
Best no-exam life insurance companies for Term Insurance
Below are the best no-exam life insurance companies in the industry today. Each life insurance company has slightly different opinions on underwriting and unique features for their term insurance. Therefore, request a no-obligation quote from one of our veteran agents. They can help you determine the best no-exam life insurance companies for you!