As the name suggests, non-medical life insurance assumes no medical test when issuing a policy as opposed to a traditional policy where medical tests are required (e.g. blood test, blood pressure, etc.). If there are no tests, insurers see the risk higher and thus often would collect higher premiums for these type of policies. 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 non-medical life insurance:
1. Simplified issue life insurance: This policy requires no medical exam but still has a number of health-related questions. Typically, the longer is health questionnaire, the lower the insurance premiums. A typical policy limit is $150,000 and if you were denied life insurance in the past two years, this policy may be not available for you.
2. Guaranteed issue life insurance: This policy has neither a medical exam, nor health questions to answer. It is available even if you were declined for a policy during the last two years. Typically, the Guaranteed Issue Life Insurance coverage (face amount) will be limited to $25,000. There are also a few limitations in terms of payouts, in case an insured dies within the first two years.
No Medical Life Insurance policies vary a lot across Canadian life insurance providers and thus it is a good idea to work with an experienced insurance broker to navigate through this complexity. An insurance broker can also evaluate cheaper, alternative insurance options e.g. Standard Term Life Insurance Plans or Standard Whole Life Insurance Plans if your health pre-conditions are not too serious.
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