What kind of Life Insurance should I Purchase? What’re the differences?
What Kind of Life Insurance should I purchase?
So the questions always come to…What kind of life insurance should I purchase?
- Purchase a Life Insurance Policy requiring a medical exam?
- Purchase a Life Insurance Requiring no Medical exam?
We can look at the specifics in just a moment, but let’s break down the two policies briefly before jumping to any conclusions.
Life Insurance Policy requiring a full Medical Exam is often referred to as a fully underwritten Life Insurance Policy.
It will require a DMV check of your driver’s license, a MIB inspection report. (showing all medical related inputted data over your lifetime.
Then, a prescription check and often even a credit check. If that’s not enough fun, that’s only part 1.
Part 2 will require a private company. Usually referred to a porta medic or traveling Register Nurse, to stop by your home or place of employment.
This is to draw some blood, request a urine sample and take a blood pressure reading.This does not include you being asked about 20-30 medical related questions. So when your thinking “what kind of life insurance should I purchase”……Remember your timeline and if you need fast approvals. Refer to the chart above to know which life insurance policies approve the fastest.
Between me and you, depending on the cost difference, I’d opt for the no-exam life insurance every day of the week.
A Life Insurance Policy requiring no medical exam, on the other hand, is obviously the complete opposite.
It is an application completed by your Life Insurance Agent. A prescription check using the same Medical Information Bureau. Sometimes certain short medical questionnaire.
It is often much faster to be approved or declined. Decisions can be made within 15 minutes of initial application or initial contact with your Life Insurance Agent.
So Now that You know the difference which one should you Purchase?
- Well, that really depends. What’s your overall need for the insurance?
Are you looking for 1,000,000 plus in coverage? Most reputable Life Insurance carriers will remove the no-exam option at 1,000,000.00 in coverage and sometimes much less?
- What kind of a budget are you on?
- How much flexibility do you have?
Between you and me, sacrificing one or star buck coffees a month is worth it not to have an entire separate Dr. Appointment for the month and definitely worth sacrificing just so I don’t have to deal with that blood draw, because I HATE NEEDLES. However, you may not mind needles and you may need the extra few dollars per month which is often the difference between the two options.
- Do you need lightning-quick approvals compared to a fully underwritten policy?
Often, clients need fast approvals for reasons. Some pertaining to business buy-sell agreements, key man policies or divorce orders by a judge to have coverage in place quickly?
If you fall into this category you should opt for the Non- Medical kind of Insurance Policy.
But what life insurance carriers offer this and how do I know who to use?
What kind of life insurance should I purchase with these specific carriers?
- Well, this one is simple. Plenty of the highest rated and highly reputable Life Insurance Carriers offer Non-Medical Life Insurance policies, you just probably weren’t aware because you had a Life Insurance Agent who had no reason to mention it, or worked for a Captive Life Insurance Agency, so he never had the option to offer it to you, to begin with. (See Why you should choose an Independent Life Insurance Agent over A Captive Life Insurance Agent) on my website to learn more about this
- I’m sure if you are anything like me, you’re ready to see a side by side comparison with a reputable company?
Let’s look. In this scenario, we are going to look at a basic- full medical exam policy for 250,000.00 in coverage for 10 years level premium on a 35-year-old male who does not smoke.
An example below will be the exact same policy with a different highly rated life insurance carrier. This won’t require a medical exam.
First, we have a fully underwritten policy coming in at roughly 21.00 per month!
This is a policy requiring the fully lengthy exam and with a company that everyone knows and loves. 21.88! Remember that number for a moment….
Yes, I’m showing it to you straight off my own rate engine I use with clients every day. It’s American National, yes, it is another company that everyone knows and loves.
YES, IT’ S CHEAPER AND YOU DON’T HAVE TO COMPLETE THE MEDICAL EXAM!
I’m assuming you are wanting to ask why?
The Life Insurance carrier is saving :
- by having less paperwork,
- not paying for that Registered Nurse (which is always on the company’s expense ledger)
- it helps generate new business. NO ONE ENJOYS THE EXAMS
It’s often the largest reason people get cold feet when applying for Life Insurance. I do get cold feet as well because of the exam and I’m an Independent Agent and do this for a living!
So, to summarize, would the above illustration always going to be the case? No, it’s not.
Can non-medical life insurance always be an option however in most circumstances?
Yes, it can, and I help hundreds of people across the United States set up policies specifically in that manner.
It’s the way the world is trending. People just don’t have the time or just don’t want to, and quite frankly, I don’t blame them.
WHY DO IT IF THE COST IS NEARLY THE SAME? What kind of life insurance should I purchase?
It is highly unrealistic that if you flipped the script on that same illustration that you would notice the 93 cents difference coming out of your account!
Although the non-medical life insurance may end up being more in some scenarios, another factor to include is TIME IS MONEY.
Hence,Always remember the option is on the table depending on who you work with to handle your life insurance needs.
Work with a Life Insurance Agent that can represent all the carriers. Not just one company and truly find the policy that fits you and your family’s needs best.
Article published and updated 2/19/2018
Josh Martin is an Independent Life Insurance Agent licensed in 47 U.S. state. Helping hundreds of people of secure Life Insurance for affordable rates with Reputable Life Insurance Carriers.