For one reason or another, people might wish to buy life insurance, but want to avoid an exam. Some don’t want blood drawn. Others don’t wish to wait for exam results and six weeks of lag time before a policy finally issues. I’ve heard of people refusing a swab of the mouth for obtaining saliva because they thought they thought the insurer was going to use it for a DNA sample. They didn’t get the insurance.
Another kind of life insurance is known as guaranteed issue life insurance, where a policy can be issued with no health questions asked and no physical exam. They do take longer to issue though and coverage amount is usually only in the $10,000 to $100,000 range with high premiums. The caveat is that the insured may have to stay alive for 2-3 years before full policy benefits can be payable. If they die before that period, only premiums paid or a small portion of the benefits will be paid.
The familiarity factor is also influential in decisions to apply for life insurance without exams. Most life insurers will not accept a physical examination from an applicant’s primary care physician. Some people simply don’t want to be examined by a nurse or paramedic they never met before when they feel that their own doctor knows far more about their physical condition than that stranger.
Other people feel as if they’re in great health, but they haven’t visited a physician in several years. These people are perfect candidates for no exam life insurance as nobody knows what conditions might be revealed through a physical exam. If something previously unknown is discovered in a physical exam, their premium might rise significantly. Other people wish to avoid an exam because they aren’t a picture of health. This could also result in increased premiums after the insurer has an opportunity to review the results of the physical examination.
To verify the accuracy of an applicant’s answers to health and background questions, the life insurer will obtain a search of the records of Medical Information Bureau, Inc. MIB has been around for more than 100 years and provides medical and background information to insurers which assists them in determining premiums. A driver’s license record is also often ordered. If a physician’s records are needed, the approval process will take longer. MIB will cross reference information provided by the applicant and notify the life insurer of any omissions or misrepresentations in the application which can assist the insurer in evaluating risk.