What Is No Medical Life Insurance?
No medical life insurance is an insurance type that doesn’t require a medical examination to qualify for coverage.
This may appeal to healthy people who don’t want to waste time visiting a doctor.
It may also benefit those who can’t qualify for a standard life insurance policy due to health issues, their job, or their hobbies.
Whatever your reasons are for considering a no medical policy, you usually need to complete a medical questionnaire.
Some insurers ask very few questions, while others may ask more.
Answer the questions honestly.
If you provide inaccurate or incomplete information it could lead to a claim denial.
Benefits of No Medical Life Insurance
1. Quick Approval
A traditional life insurance policy may take weeks to process and finalize as the insurer needs to verify your personal and medical information.
Conversely, no medical insurance policies offer quick approval, usually within 48 hours.
However, not all policies provide immediate coverage.
2. Coverage with Health Issues
Applicants with an underlying health condition are often denied coverage through traditional life insurance policies.
Luckily, some insurers do offer no medical life insurance coverage, even if you have a pre-existing condition.
3. Insurance for Dangerous Jobs & Hobbies
Some people work in dangerous jobs and insurers don’t want to assume the risks of their occupation.
Examples may include underground mining, quarry work, commercial fishing, roofing, and ironwork.
Additionally, some recreational pastimes can be too risky for many insurers.
For instance, they may not offer coverage if you hang glide, pilot an airplane, skydive, bungee jump, rock climb, or race.
If they do offer coverage, the cost can be prohibitively high.
Fortunately, no medical life insurance may offer coverage for these activities and sometimes at a more reasonable price than a traditional life insurance policy.
4. Death Benefits
Some no medical life insurance policies offer death benefits, with limits between $25,000 and $50,000.
If you’re over 50 years of age and healthy, buying one of these policies may make more economic sense than a traditional policy.
Traditional policy costs may increase by between 5 and 8 percent annually once you hit this age benchmark, making them prohibitively expensive.
Drawbacks of No Medical Life Insurance
1. More Expensive
Traditional life insurance is less expensive because your insurer requires a medical examination and understands the risks.
Their health investigation is thorough and may include your family medical history, lifestyle habits, and your personal medical records.
They underwrite the policy based on this known information and align your premiums based on your risk level.
However, a no medical life insurance policy depends on much less information.
Since the insurer has a lower confidence in what your risk level is, they charge a higher premium.
2. Lower Coverage Limits
No medical life insurance policies do not offer the same coverage limits as traditional, underwritten life insurance policies.
Traditional policies may offer coverage limits in the millions.
However, you’d be hard-pressed to find a no medical life insurance policy offering more than a maximum of $500,000.
Coverage amounts also depend on which no medical life insurance you choose.
Policies fall under two general categories: simplified issue and guaranteed issue.
Policies that require a health questionnaire are usually simplified issue life insurance policies.
The insurer will probably ask you about hospitalizations, severe conditions, and whether you’ve been denied coverage elsewhere.
The maximum policy limit is usually no more than $500,000, but sometimes much less.
Policies that don’t require an exam or many questions are often guaranteed issue life insurance policies.
Benefits for a non-accidental death through illness or age can be as little as $5,000 and usually no more than $50,000.
3. Waiting Period
Some “deferred” simplified and guaranteed issue policies don’t offer coverage until after a waiting period (usually 24 months).
If you die during this time, they refund the premiums paid, but do not pay out the death benefit.
These policies often ask the least questions and offer the lowest policy limits.
Key Insight
Don’t automatically assume you can’t qualify for a traditional policy. Insurers use their own scorecards to determine eligibility and these scorecards can vary greatly.
If you apply for several and they all turn you down, you can always apply for a no medical life insurance policy later.
Who Offers No Medical Life Insurance?
You can obtain life insurance through your agent or broker.
Most major insurers offer some form of no medical life insurance.
Some offer life insurance and death benefits through separate policies.
The following is a sample of coverages offered by some Canadian insurers:
| Company | Max Age | Coverage Range | Questions |
|---|---|---|---|
| Canada Protection Plan | 80 | $75,000 – $500,000 | 23 – 39 |
| Foresters Financial | 70 | $10,000 – $100,000 | 10 |
| Humania Assurance | 70 | $300,000 | 6 – 18 |
| Industrial Alliance | 70 | $25,000 – $500,000 | 5 – 13 |
| Manulife – Cover Me® Manulife – Quick Issue® |
85 50 |
$75,000 $100,000 – $500,000 |
15 |
| Specialty Life – Life Insurance Specialty Life – Final Expense |
70 | $300,000 $5,000 – $25,000 |
12 3 |
| SSQ Insurance | 70 | $25,000 – $500,000 | 51 |
Source: Protect Your Wealth
