One of the reasons people turn to no exam life insurance as an alternative to traditional life insurance is because health plays less of an important role in determining approval and monthly premiums. People who are not in a great state of health or have chronic health conditions can usually get approved more easily for no exam policies than for traditional policies.
However, while most people get approved for no exam life insurance, there are various factors that determine the cost of your monthly premiums. With some types of no exam insurance, basic health does play a role, with others, it doesn’t.
So what can you expect to influence the cost of your monthly premiums? Read on to find out.
6 Factors That Impact the Cost of No Exam Life Insurance
Getting no exam life insurance can be done entirely online, but before you jump in, it’s important to be aware of the factors that impact the cost of your monthly premiums. Below are the most common ones. If you want to get a practical idea of how much you can expect to pay, click here for a free quote.
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Amount of Coverage
Whether you choose no exam life insurance or a traditional policy, the amount of coverage you need will affect how much you pay. The higher the amount, the higher your premiums will be. Of course, that doesn’t mean you should skimp on coverage, since the whole point of getting life insurance is to provide your loved ones with financial support in the event you die. It does mean, however, that you should make sure not to overestimate how much coverage you need.
Just as higher coverage leads to higher premiums, a longer term length also does. Terms come in increments of 5, so it’s logical that a 20-year term policy will cost more than a 5-year policy. This is another instance in which it’s crucial to determine how long you actually need coverage for (until your child finishes college, gets married, until you pay off the mortgage?). If you get a longer term unnecessarily, you will be paying higher monthly premiums. Or worse, if you get a shorter term than necessary, your loved ones may not have the coverage they need. (You can renew, but when you renew 5 or more years after your initial policy, premiums are likely to go up. See Age below.)
Type of Life Insurance
The type of no exam life insurance you get will affect how much you pay in monthly premiums. Simplified Issue, which is a type of term policy, usually costs less than Guaranteed Issue, which is whole no exam life insurance. The reason is that Simplified Issue asks basic health questions and approval is not guaranteed, whereas Guaranteed Issue doesn’t ask any health questions and approval is guaranteed. With guaranteed approval, rates will be higher since the risks are higher.
Like it or not, age plays a role in determining how high your rates are. Almost always, the younger you are, the better rates you get. This isn’t agism, but rather, when you are young, you are generally in a better state of health — this is simply the nature of aging. As you get older, complications can occur and they can drive up the cost of premiums. Sproutt insurance advisors recommend buying life insurance in your 20s or 30s so that you can lock in lower premiums for the entire duration of your term.
Simplified Issue no exam life insurance asks some health questions, whereas Guaranteed Issue doesn’t. But in most cases, smoking is the exception and applications include a question about tobacco use. This is because smoking causes premature death, which makes smokers a huge risk for life insurance companies. How long you’ve smoked and how you use tobacco will influence just how much your rates will climb. On the other hand, if you quit for a significant amount of time, you have a chance at having your rates lowered.
Career & Hobbies
Two things that you would never associate with life insurance actually affect how much you pay per month. If you have a dangerous career, like a firefighter or stunt double, or dangerous hobbies, like rock climbing or skydiving, you are likely to be given higher rates for no exam life insurance.
No Exam versus Traditional Policies
When you apply for traditional life insurance, your health plays a major role in determining your premiums. And we’re not talking about your general health — we are talking detailed health questions, including inquiries into your BMI, chronic diseases, medical history, how often you exercise, how much you sleep, the state of your mental health, and more. Genetics also plays a role, and you will also be asked whether your family has a history of heart disease, diabetes, cancer, etc.
When you apply for no exam life insurance, you don’t have to expose your medical history in such an open manner. That’s one of the benefits, along with fast approval times, an easy application, and not having to waste hours at the doctor’s office.
For both traditional and no exam policies, it’s crucial to provide accurate information when applying. If the information you provided isn’t accurate, the insurance company has grounds to deny the death benefit claim if it is ever needed. This means that your beneficiaries may not get the life insurance payout, which defeats the entire purpose of getting life insurance in the first place.