The Myth of No Medical Exam Life Insurance

Most life insurance companies require a medical exam to ascertain the applicant’s existing health condition that helps determine whether he/she is leading a healthy life and live longer. The idea of buying a life insurance without medical tests might seem advantageous, but it’s wise to read the advantages that it offers and the myths you must look into.

For some people, buying a policy with no medical exam may seem advantageous in view of the following reasons:

  • It helps you avoid the cumbersome process to go to the medical center and get the medical checks done.
  • As you avoid going through medical test, the chances for rejection of application due to health issues also become nil.
  • If you opt not to go for medical tests, The time taken by the insurance company for approval of the policy can get reduced by 7 to 10 days.
  • Not going for medical test is advantageous for individuals having pre-existing condition, who otherwise have to pay higher premiums or get their application rejected.

Myths about No Medical Life Insurance

Here are some myths about no medical life insurance that you need to clarify, before going to opt for.

Myth 1: A life insurance without medical exam is easier to qualify for.

Reality: Actually, no medical exam policies are harder to qualify for. As, the insurance company is limited in what it can review and thus, make underwriting guidelines more stringent. For example, the application may ask for high blood pressure, but due to no medical exam, the company cannot see how high it is. Due to these restrictions, the company becomes more strict with its underwriting norms.

Myth 2: Cost is the same.

Reality: No medical exam life insurance policies cost more, as the company tends to charge higher premium basis the perceived risk that your health is exposed to. The health risk is actually determined with the help of the medical test which is missing in such scenario.

On the other hand, if you go through medical test, you can take advantage of ‘preferred rate’ that helps you to get a lower rate of premium, in case you are declared healthy.

Myth 3: No-Medical life policy is a win-win situation.

Reality: By avoiding medical tests for a life insurance policy, you can get policy, even if you are having a pre-existing medical condition. It looks a smart move, while buying a policy, but at the time of the claim settlement, the company scrutinizes your medical condition and will not settle the death claim under the insurance policy. As you did not disclose your medical condition while applying for the policy, the company is just going to deny for the claim amount on the grounds of “non-disclosure of material facts”.

As, you are not going for a medical exam at the time of issuance of the policy, it’s your responsibility to disclose all your personal and medical information before applying for life insurance.

Myth 4: No-Medical exam life policies are the same.

Reality: As life insurance policies cover your Human Life Value. It is an amount calculated based on the medical and financial underwriting. However, policies which don’t include this underwriting process, may limit the cover.

Going with no-medical life insurance policy, you are provided an under-insured cover which can bring devastating financial consequences. In the event of your unfortunate demise, the cover amount is payable to the family and as, you have an under-insured cover, this amount will not be able to fulfill the financial needs of your family.

Going through the myth & the reality associated, it is not a justified decision to buy a life insurance without medical. The insurance company may charge you the higher premiums plus provide limited cover as well.

Don’t forget to read this Articles: Why Medical test is important in Term Insurance?

Conclusion

A no-medical life insurance policy may provide you some convenience of getting the policy quickly and without hassles, but you need to assess whether it provides you an adequate cover within your budget.

If you are healthy and don’t have health issues, then you may go ahead in buying a life insurance without medical. In case, you have some illness and hiding it for getting the policy, it would be a disastrous decision. When you have health issues, it is recommended to get the medical check up, so you can know about your present health scenario and the insurance company will provide you the life cover accordingly.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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