No Medical Life Insurance Guide: Intro
Welcome to your non-medical life insurance guide. This page will give you a good understanding of no medical life insurance, will inform you of savings opportunities, and will also provide a number of other useful tips based on our publications.
The difference between non-medical life insurance and traditional, or standard life insurance, is that you do not need a medical exam in order to get this protection; but everything comes at a price. Since the insurer is not able to determine your health conditions, the assumption will be that you are a higher risk customer and thus, typically, no medical life insurance costs more than traditional life insurance. Let’s see which cases would benefit from no medical life insurance the most:
- You have been declined for life Insurance: Approximately 5% of all life insurance applications in Canada are declined annually. The primary reasons for this is medical conditions or life style issues. In this case you might want to look into non-medical life insurance as an alternative.
- You have a serious health issue(s): There are numerous health related issues that can affect your ability to get traditional life insurance (Parkinson’s Disease (PD), Cancer, Alzheimer’s etc.). Nevertheless, there is still a chance you could obtain a traditional life insurance policy, and only when that does not work should you consider a non-medical life insurance policy alternative. An experienced broker will be aware of the particular insurance programs insuring those issues.
What Types of No Medical Life Insurance exist?
As the name suggests, no medical life insurance assumes no medical tests when issuing a policy, as opposed to a traditional policy where medical tests (blood test, blood pressure, etc.) are required. If there are no tests, insurers see the customer as a higher risk and thus (often) collect higher premiums for this type of policy. At the same time there is often a coverage limit on these policies in order to minimize insurance risk. There are basically two types of no medical life insurance:
Simplified issue life insurance: This policy requires no medical exam but still has a number of health-related questions required of you to answer. Typically, the longer the health questionnaire, the lower the insurance premiums. On average this type of policy has a limit of $150,000, and if you were denied life insurance in the past 2 years, this policy might be not available for you.
Guaranteed issue life insurance: This policy has neither a medical exam, nor a health-questionnaire to answer. It is available for you even if you were declined for a traditional policy during the last 2 years. Typically the coverage (face value) will be limited to $25,000 and there are also a few limitations in terms of payouts, in case an insured dies within the first 2 years.
How Can You Save on Life Insurance?
- Smoking matters less: The older you are the less insurers care about smoking. The difference between smokers and non-smokers erodes as people age
- Sometimes “no medical” can mean no money: If you choose non-medical life insurance policy and it offers a graded or deferred benefit it can mean that death benefits are limited during the first few policy years or simply not covered if death is due to medical reasons.
- Seniors have choices: The discrepancies in the amount you pay as a life insurance premium are much larger for seniors than for younger applicants. With such a range of premiums for seniors, it’s worth doing a little shopping around to see which policies might better meet your needs.
- Cancer cases are treated differently: Insurance companies treat cancer cases differently (it is often considered as a high-risk case) and thus talking to a broker, who knows that field well, can save a lot.
- Diabetics is insurable: Many companies will not cover people with diabetics issues but some will and again you’d better to rely on a broker who has experience in this field and can help to get insurance and optimize premiums.
- Annual vs. monthly payments: In comparison to monthly payments, annual payments save insurers administrative costs (e.g. sending bills) and therefore they may reward you with lower premiums.
- Age rounding is important: If you decide to buy a life insurance policy, make sure that your age rounds down and not up, i.e. if you are going to be 65 years old on December 31, buy the policy in the first 6 months of the year where your age is still rounded down to 64 and not 65.
- Other tips: Contacting an experienced, licensed broker (see a button below) will help you to find other ways to reduce insurance premiums of your life insurance premiums. Discussion with broker is entirely free and there is absolutely no obligations to buy.