Many traditional life insurance policies require a medical exam. This process allows the insurer to gather an applicant’s health data to calculate premiums. However, medical exams can be inconvenient for many millennials who are busy with their careers and families.
Fortunately, some life insurance policies don’t require a medical exam, making them easier to apply for while offering cost savings and wealth-building potential.
According to LIMRA’s 2022 Insurance Barometer Study, 47% of millennials have a need for life insurance. This article will dive into what millennials should know about life insurance with no medical exam, then cover two policy types millennials can take advantage of if they want to skip the exam.
Facts about life insurance with no medical exam
Here are a few facts millennials should know about life insurance with no medical exam:
1. Policies often have quick approval
The medical exam is often the longest part of the life insurance process. It can delay the process by weeks or even months. Since no-exam life insurance does not require a medical exam, insurers may approve policyholders in as quickly as 24 hours.
2. Getting a policy can be more convenient
Regular life insurance policy medical exams may require travel to the testing facilities or having the tester visit the policyholder’s home. Both of these can pose inconveniences to busy millennials. However,since no-exam life insurance lets applicants skip the exam, they do not have to worry about these inconveniences. Instead, they can complete the entire process online.
3. Premiums may be cheaper
Some life insurance policies with no medical exam are smaller than traditional life insurance policies. This means the death benefit is smaller, but premiums may be more affordable. So, millennials looking to minimize expenses could benefit from this type of policy.
4. Policyholders can build wealth
No-exam life policies still get the same cash value growth component as traditional permanent life insurance policies. Part of each premium goes into this growth component, which then grows at a fixed interest rate for no-exam life insurance policies. This helps millennials build additional wealth earlier in life while maintaining coverage. The policyholder can withdraw from or borrow against their cash value when it grows large enough. If they surrender their policy, they get the cash value minus surrender charges.
Types of life policies with no medical exam
Policyholders that want life insurance with no medical exam should consider the following policy types:
Simplified issue life insurance
Simplified issue life insurance is a small permanent life insurance policy designed for healthier individuals who don’t want to take the medical exam and need life insurance right away. The insurer will still require a health questionnaire for underwriting but won’t demand a medical exam.
Simplified issue life insurance policies tend to have higher death benefits than other no-exam policies but lower death benefits than traditional life insurance policies. As a result, millennials may find simplified issue life insurance helpful if they want to skip the exam but need more coverage.
Guaranteed issue life insurance
Guaranteed issue life insurance is a policy that has no medical exam or questionnaire. Guaranteed issue life policies also tend to have a two to three-year lockout period. If the policyholder passes away during the lockout period, their beneficiaries may get the policyholder’s premiums refunded, but not the death benefit. Still, this can be a good potential option for people who want to avoid submitting health information and save on premiums.
Consider life insurance with no medical exam
Millennials don’t need to take a medical exam to get life insurance. No-exam life insurance policies can offer more convenience, faster approvals, and lower premiums without sacrificing the wealth-building power of the cash value growth component.
Healthier millennials may opt for simplified issue life insurance since it still contains a health questionnaire. Those who want to skip the questionnaire may consider a guaranteed issue life insurance policy to prevent medical issues from impacting coverage. No matter the policy type, millennials should shop for multiple quotes to get the most coverage for their money.
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