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No Exam Life Insurance
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No Exam Life Insurance. What Are The Concerns?
Well actually the biggest disadvantage of no-exam life insurance is really the price. It obviously tends to be higher. Look at it this way, the insurance company is willing to take anyone's word for the approval. In other words if the applicant does not tell the truth on the application and it gets approved, the insurance company is essentially stuck with a potential quarter million dollar claim in the near future.
What we are trying to say here is that if you are healthy and you are willing to wait two to six weeks for an approval, a fully underwritten plan may turn out to be a lot cheaper than a no-exam life insurance plan.
Another potential pitfall of no-exam life insurance is that some no-exam life insurance plans are not convertible or if anything no exam life insurance plans are only convertible to substandard permanent insurance. Convertible! Well, as you may have guessed, we are not talking about a car here. So, what does it mean when a term plan is not convertible? Simply this, if at some point in the future you decide that you want to change your plan (which most people do) to a longer permanent plan like whole life, universal life, indexed life... you are simply stuck. No change allowed or at best lousy choices!
You may say that you can always apply somewhere else later on and cancel your no exam life insurance plan. Well maybe yes and maybe no. As you may encounter a rather common big potential problem. As you get older, your health does not usually improve. If you are not healthy, you may not qualify for any type of life insurance or if you do, it may be way too expensive for your budget.
So, bottom line, read your policy and understand it before you decide that you do want a no exam life insurance plan. We are not saying you should not do a no exam life insurance, we are just saying make sure you ask and re-ask many questions before deciding. After all, that is why we are here for. Remember, we are your unbiased source of answers for insurance products. Be well!
We saw this on a life insurance peddler's web site. Interesting but so inaccurate: CLICK HERE
