Life insurance is one of the most important purchases you can make in your adult life, which means a lot of thought and consideration needs to go into choosing the right policy. There are so many life insurance products out there, it can be overwhelming. The product that we would like to focus on is no exam life insurance.
No exam life insurance is different from traditional life insurance because it doesn’t require a medical exam. There are many reasons why someone would want to skip the medical exam required for traditional policies:
- They don’t like doctors or are afraid of needles
- They don’t have time to undergo an exam
- They need approval quickly, for a divorce or SBA loan
- They are not in the best health
No exam policies are a great solution for anyone who fits the above descriptions. They are known for granting approval in days as opposed to weeks or months. Plus, people who might be turned down for traditional policies due to medical issues can get the coverage they need through no-exam policies. To learn more about no-exam policies and what they offer, visit Sproutt.com.
Underwriting and Assessing Risk
While the benefits of no-exam life insurance are many, they do come at a cost. Most no exam policies are more expensive than traditional policies, not only because of the convenience they provide, but because of the underwriting process, or lack thereof. You can get an idea of the cost by getting a free quote here.
Traditional life insurance policies require applicants to undergo a medical exam so that underwriters can complete statistical analysis and assess the risk that each person poses to the insurer. The healthier a person is, the less of a risk they pose, and the lower their premiums will be. The unhealthier a person is, the more of a risk they pose, and the higher their premiums will be. If a person is in a very bad state of health, the risk can be so high that they will be turned down altogether.
No exam policies require very little or no underwriting at all. Due to this fact, insurers are not able to accurately assess their risk, which makes the premiums go up.
Today we’re going to look at a type of no-exam policy that is an exception to this rule. Accelerated Underwriting is a type of no exam policy that allows insurers to accurately assess their risk and offer competitive prices like their traditional counterparts.
Speed is the name of the game when it comes to Accelerated Underwriting policies. In fact, the sole purpose of these policies is to offer fast approval. How does it work?
Accelerated Underwriting policies are the same as traditional policies, only they don’t require a medical exam. Applicants are required to disclose detailed health information, and at the same time, insurers collect information from third-party sources. These include records from your pharmacy, the Department of Motor Vehicles, financial records, and more.
There is then a dedicated team of underwriters who only focus on Accelerated policies, and they work quickly to compare all the information against millions of statistics. While there is always a possibility that some piece of information will come up that needs further delving into, most Accelerated Underwriting policies offer significantly quicker approval than traditional.
Coverage with these policies is usually limited to $500,000 or $1,000,000 at the most.
In rare cases, the team of underwriters may feel that they don’t have enough information to complete an accurate risk assessment. In these situations, the insurer will then ask the applicant to undergo a medical exam. This usually happens when an applicant is older or not in such great health. It is unlikely to happen when an applicant is younger and in good health.
Ideal Candidates For Accelerated Underwriting Life Insurance
The ideal candidate for an Accelerated Underwriting policy is in good health, within the age range specified by the insurer, have no serious medical conditions like cancer or diabetes, and has healthy blood pressure and cholesterol levels.
Non-medical requirements include good credit, no bankruptcy within the past 10 years, no history of DUIs or moving violations, and no dangerous hobbies or jobs.
As you can see, qualifying for an Accelerated Underwriting policy can actually be harder than qualifying for a traditional policy or a different type of no exam policy. If you do fit the requirements for an Accelerated policy, it’s a great way to save time and get quick approval. If you don’t, there are plenty of other types of no-exam life insurance policies, including Simplified Issue and Guaranteed Issue.
Before jumping into anything, consider whether you could qualify for an Accelerated Underwriting policy. It is certainly the most convenient and cost-efficient type of no-exam policy. If not, however, do your due diligence and find a different type of policy that can offer you coverage. The main point of life insurance is to offer some sort of financial protection to your loved ones, so even if you have to pay monthly premiums that are a bit higher, the goal can be worthwhile.