As the name implies, you don’t need to undergo any medical examinations if you purchase this type of policy. It allows you to skip the detailed paperwork that asks tons of questions regarding your medical history.

 

No exam life insurance is very popular among senior citizens with severe health conditions. They will not be eligible for general life insurance policies. Instead, with no exam life insurance, they don’t need to undergo any tests and create a fund to secure their families financially after they die.

 

Who should you buy a no exam life insurance?

 

It is comparatively easier to purchase a no exam life insurance than a traditional life insurance policy as it does not involve any medical test. Moreover, these policies are more affordable than other life insurance policies. Ideally, they are for elderly citizens and patients with low life expectancy. Here is a list of people who should purchase a no exam life insurance:

 

• Patients with a chronic health condition like type-2 diabetes. This type of disease is very challenging to treat. No insurance company would want to offer a regular life insurance policy. In that case, a no medical life insurance policy will come in handy.

• Many people don’t want to purchase an underwritten policy. No exam life insurance will be ideal for such people. The scheme starts as soon as you pay the initial premium.

• People involved in high-risk jobs can also apply for no exam life insurance policies. Many people challenge their lives by participating in risky hobbies, such as skydiving. Insurance companies may not agree to provide a regular life insurance policy for such people. No exam life insurance is a better alternative in these cases.

• Retired people with complicated health issues can also buy no exam life insurance policies. If you know that your health condition is so severe that you can die any day, you can purchase a no exam life insurance policy as it would provide significant coverage to your family after your death.

• Many companies don’t provide group life insurance facilities to employees suffering from chronic, untreatable diseases. That doesn’t mean, however, that employees cannot get any type of insurance policy. They can apply for no exam life insurance policies and enjoy their benefits even if they lose their job.

No exam life insurance policy is beneficial in many ways, but it is suitable only for senior citizens and those suffering from terminal illnesses. Make sure you read the terms and conditions of the policy carefully before signing the documents.

 

 

• Whole life insurance

• Universal life insurance

• Burial insurance/funeral insurance

• Survivorship life insurance/joint life insurance

• Mortgage life insurance

• Credit life insurance

• Group life insurance

 

Term Life Insurance

The basics: Term life insurance has a specific end date of coverage. Choices of coverage lengths are generally 5, 10, 15, 25 or 30 years. It’s the cheapest way to buy life insurance because you’re buying only insurance coverage, for a finite period, and not paying for a cash value component within the policy.

 

Who is it good for: Term life insurance is ideal for people who want life insurance coverage for a specific debt or situation. For example, some people buy it to cover their working years as income replacement for their family. Some people buy term life to cover the years of a mortgage or other large debt.

 

Downside: You might outlive a term life policy. If you still need coverage after it expires, you could find new life insurance to be extremely pricey based on your age and any health conditions you’ve developed.

 

 

The basics: Whole life insurance can provide coverage for the duration of your life. An account within the policy builds cash value over time by using part of your premium payment and adding interest. A policy will have built-in guarantees that the premium will not increase, the death benefit remains the same, and the cash value will earn a fixed rate of return.

 

Who is it good for: Whole life is suited for people who want lifelong coverage and are willing to pay for the guarantees provided by the policy.

 

Downside: Because of the guaranteed features, whole life insurance is one of the more expensive ways to buy life insurance.

 

 

The basics: Universal life (UL) can be hard to understand because there are a few varieties and with very different features. The common element is that universal life can provide lifelong coverage. It can be cheaper than whole life insurance because it generally doesn’t offer the same guarantees.

 

With some forms of universal life you can vary premium payments amounts and rejigger the death benefit amount, within certain limits. UL policies often have a cash value component.

 

Who is it good for: Universal life can be good for someone looking for lifelong coverage. Some varieties of UL are suited for people who want to tie their cash value gains to market performance (indexed and variable universal life insurance).

 

Downsides: If cash value is your main interest, not all UL policies guarantee you’ll make gains. And if you’re interested in flexible premiums payments, you have to stay on top of your policy’s status to make sure that the policy’s fees and charges don’t deplete your cash value and cause it to lapse. Understand what’s guaranteed within a UL policy and what isn’t.

 

 

The basics: You may see this kind of policy called burial, funeral or final expense insurance. No matter the name, it’s usually a small whole life insurance policy that’s intended to pay only for funeral costs and other final expenses. It’s often offered as a policy that you can’t be turned down for and that doesn’t require a medical exam.

 

Who is it good for: These types of policies are generally for people in poor health who don’t have other life insurance options and who need insurance for funeral expenses.

 

Downsides: Burial insurance policies are expensive, based on the amount of coverage you get. They also have a safeguard for the life insurance company: Your beneficiaries won’t get the full death benefit if you pass away within two or three years after buying the policy.

 

Check the policy’s timeline for these “graded death benefits.” Your beneficiaries might receive only a refund of the premiums you paid in, plus some interest.

 

 

The basics: These joint life insurance policies ensure two people under one policy, such as a husband and wife. The payout to beneficiaries is made when both have passed away. You may see them called second-to-die life insurance, but for understandable reasons the industry is moving away from this name.

 

Survivorship life insurance can be less expensive than buying two separate life insurance policies, especially if one of the people has health issues.

 

Who is it good for: These policies are beneficial in estate planning when the life insurance money is not needed by a beneficiary until both of the insured people have passed away. Survivorship life insurance might be used to fund a trust, for example. It’s also suited for high net worth couples who want to provide money to heirs for estate taxes. Or it could be used by a couple to provide a donation to charity.

 

Downside: If two spouses are insured and one would suffer financially if the other passed away, this is not the right policy type. The surviving spouse does not receive any life insurance benefits. The payout is only made when both have passed away.

 

 

The basics: Mortgage life insurance is designed to cover only the balance of a mortgage and nothing else. This policy type is different from the life insurance types above in two major ways. First, the death benefit is paid to the mortgage lender, not a beneficiary that you choose. Second, the payout is the balance of the mortgage, or partial balance if that’s what you insured.

 

Who is it good for: Mortgage life insurance is intended for people who are primarily concerned about their family being burdened by the mortgage if they passed away. It can also be appealing to someone who doesn’t want to take a medical exam to get life insurance.

 

Downside: This type of policy won’t provide financial flexibility for your family.

 

If you’re looking for life insurance to cover a mortgage or other debts, you’re better off with term life insurance. You can choose the term length and amount, and provide more than just mortgage money to your family. Your family can use a payout for any purpose. They may decide to use the money elsewhere.

 

 

The basics: Like mortgage life insurance, this insurance covers a specific debt. When you take out a loan you might be offered credit life insurance. The payments can usually be rolled into your loan payments. The life insurance payout is the balance of the debt and it’s paid to the lender, not your family.

 

Who is it good for: If you’re concerned about how your family would pay a certain debt if you passed away, credit life insurance might look appealing and convenient. It can also be attractive because there’s no medical exam required to qualify.

 

Downside: Credit life insurance is very narrow and doesn’t allow financial flexibility in the future. You’re probably better off with term life insurance, which you can use to cover many concerns, from debt to income replacement to funeral expenses. A broader policy like term life will give your family more financial options if you pass away.

 

 

The basics: The life insurance you may have through work is supplemental life insurance, also known as group life insurance. It sets rates based on the group, not the individual.

 

Who is it good for: Because usually it’s free or inexpensive, group life insurance is a good value. It’s good as supplementary coverage to your own individual life insurance policy.

 

Downside: If you lose the job you generally lose the life insurance, too. That’s why it’s best to have your own life insurance that’s not tied to the workplace. Plus, on your own you can buy higher amounts of insurance.

 

 

 

In Canada, the majority of life insurers reported a decline in face-to-face applications. But five in 10 companies that accept online/mobile applications saw no change in their application numbers – only three in 10 of online/mobile application-accepting companies reported increases. Of the one in 4 Canadian life insurers accepting call center/mail applications, none saw any significant change in applications.

 

LIMRA also found that insurers were changing some of their business practices due to the pandemic. Over a quarter of US life insurers have expanded their automated underwriting practices, the survey found. One in five US life insurers have postponed/waived paramedical requirements. Some of the surveyed companies also said that they have added questions on COVID-19 exposure and travel to the underwriting process, are now requiring good health statements, accepting electronic health records, and are allowing historical exam and lab data instead of an exam. LIMRA also discovered that a “small percentage” of carriers are implementing premium limits for new coverage.

 

North of the border, LIMRA found that many Canadian life insurers have either made, or are planning to make, changes to their underwriting practices. Most companies are waiving paramedical requirements, while half are postponing exams until regular operations can resume.

 

The survey noted that Canadian life insurers are also extending grace periods, but only a few are offering other types of relief for customers financially impacted by the pandemic. LIMRA believes that this may change, since several of the surveyed companies indicated that they are still reviewing “possible changes.”

 

 

 

But, you don’t have to wait for something to change in your life to get coverage. In fact, it’s probably cheaper not to. Life insurance gets more expensive with each year you wait. If you think you’ll need it in the future, there’s no reason to wait.

 

We asked O’Banion for some of the life events he’s seen inspire people to take the plunge and sign up — just in case you want to get ahead of the curve.

 

 

Big life events often prompt new parents, newlyweds, or new homeowners to look for life insurance coverage. For anyone with dependents, life insurance is critical, and these big changes prompt life insurance shopping. 

 

“If anybody is depending on your income and you do not have a stockpile of money, which is 90% of everybody who has dependents today, you should have some form of life insurance,” O’Banion says. For many, these new responsibilities mean looking into life insurance for the first time.

 

“That, by and large, is the No. 1 life event that causes somebody to purchase life insurance,” O’Banion says.

 

 

Term life insurance policies are sometimes offered through employers. But when leaving a job, the coverage doesn’t carry over. After a career move or job change, it might be time to search for new coverage.

 

“We see a lot of people who move into independent worker status, where they had group life insurance policies and now they don’t. They come and buy an individual policy with us because of a change in employment status,” O’Banion says. 

 

Raises or new jobs could also provide a salary increase, allowing for some extra room in the budget, he says. While a life insurance policy may not have been in the budget before, it may be within reach now. 

 

 

One situation O’Banion says is particularly motivating is a death in the family. When something happens close to home, it can be a reminder of just how important term life insurance is for settling final expenses, taking care of family members, and paying off debt.

 

World events can also prompt people to look for coverage and to buy. “The pandemic is obviously motivating a lot of people to buy today,” he says. “We’re getting a massive increase in traffic literally week over week.” Other life insurance agency experts seen similar patterns, with the coronavirus spread acting as a catalyst for those who had been putting off coverage to finally sign up.