Is No Exam Life Insurance a Good Choice for Older Parents?
No exam life insurance is a good option for older adults who have medical issues or who hate medical exams. Find out what types are available here.
If your parents are older and don’t have life insurance, you may think that it’s too late for them. But actually, there are plenty of life insurance options for older people, and many of them offer the convenience of not requiring an exam as part of the application process. This makes getting life insurance a lot more convenient. No exam life insurance is also easier to get if you have minor or serious medical issues, which many seniors have.
What is no exam life insurance?
No exam life insurance allows you to purchase a life insurance policy without the exam and the lengthy wait for approval. There are several types of no exam policies available:
- Simplified issue term no exam life insurance
- Simplified issue whole no exam life insurance
- Simplified issue graded whole life insurance
- Guaranteed issue no exam life insurance
Simplified issue term no exam life insurance
This type of no exam policy offers the most coverage, up to $500K. However, it’s also the hardest type of no exam policy to qualify for. People with serious health issues will have a hard time getting approved. These policies are partially underwritten, which means that underwriters know some health information about you, but not as much as a medical exam would provide. Being partially underwritten also means that this is one of the more affordable types of no exam life insurance. Get a free quote here to compare prices.
Simplified issue whole life insurance
This type of life insurance is often called final expense or burial insurance. The death benefit is designed to cover the costs of funeral and burial services, which range between $7000 to $12,000. Coverage maxes out at $40K and is usually available to anyone under the age of 90. Many carriers offer this type of life insurance, so you can compare prices before buying.
In order to qualify for final expense insurance, you need to answer “no” to a few health questions. These questions usually revolve around terminal illnesses, hospice stays, and HIV/AIDS. If you can answer “no” to all of them, you can get coverage. As whole life insurance, the policy is valid for your entire lifetime and the premiums don’t increase.
Simplified issue graded whole life insurance
This is very similar to regular simplified issue whole insurance, but it’s more lenient than the former because it offers coverage to people who answer “yes” to the health questions. However, there is a catch, and that comes in the form of a graded policy. Graded means that you are not fully covered from the time of your purchase. There is a waiting period of two or three years until you can get the full amount of coverage, if necessary. If you die before the waiting period is over, only a percentage of the death benefit will be paid out. Coverage for this type of policy goes up to $20K and is usually available to anyone under the age of 80.
Guaranteed issue no exam life insurance
Anyone can qualify for this type of life insurance, as long as they are under the age limit, which is usually 80 or 85. (It depends on the carrier.) There is no underwriting whatsoever for this type of policy, which is why everyone can be approved. Of course, this convenience also comes with a catch. In this case, there are two catches. The first is that monthly premiums are very high, and the second is that there is a waiting period regarding the death benefit. If you die within two or three years of purchase, the death benefit will not be paid out to your beneficiaries. Rather, the monthly premiums will be refunded, plus interest. Coverage for guaranteed issue goes up to $25K, but due to the restrictions, it’s considered a last resort for people who can’t get any other type of life insurance.
Deciding which types of no exam life insurance is right for your parents
Deciding which type of life insurance policy to get isn’t easy, especially if you’re purchasing it for your parents or loved ones. However, the one thing to know off the bat is that guaranteed issue should be the last type of policy you choose, and it should only be if you can’t qualify for other types of life insurance.
If deciding between the other types of no exam insurance, you need to consider your parents’ financial situation, the amount of coverage they need, whether term or whole is better, and whether their health issues will be an issue in qualifying.
It’s important to note that you should always discuss purchasing life insurance with your parents and make it a joint effort. Life insurance can be a sensitive subject, so it’s best to have your parents on board with you before making any decisions. Additionally, the only way to know which type is best for them is to discuss their needs openly.