The idea of “no exam” life insurance can be a real problem with insurance advisors looking to decide if it is right for their client or not.
No exam life insurance typically comes with less coverage, with an average of under $400,000. These policies are also often more expensive than medically underwritten policies. Another problem with them is that the companies that offer this style of insurance tend to be less-known than larger companies. “Even though no exam life insurance is a little limited,” says TrueBlueLifeInsurance founder Brian Greenberg, “there are some occasions when it can be the right choice for your client.”
To help you gain a better understanding of whether a no exam life insurance policy is the right choice, here are five occasions when it could be.
Many clients feel that the convenience of getting a no exam life insurance policy outweighs having to pay higher premiums. Some people are just far too busy to have a medical exam performed even if they know they need it for the coverage. Instead of having to wait for the client to undergo a medical exam they can just call you or have a short meeting to go through the application. You can apply for a no exam policy in less than 20 minutes and the client will have coverage from a great company in just 24 hours. They could also choose to undergo a medical exam later on to have their premiums lowered.
- If they Need Coverage Quick
There are many clients who need to get coverage in a hurry. There could be any number of reasons for this including needing to secure a loan or divorce arrangements. No exam policies are great in this case because they can have their policy ready in 24 hours. If a customer needs to have quick coverage but needs to be covered for more than $400,000 they can take the approach of having a “stack policy”. If the client needs to have over a million in coverage but don’t have the time to go through the underwriting process, then you can put the client on a number of no exam policies across several companies to give them the coverage they need. Of course if you take this route you need to be honest and upfront with the other companies, because there are rules on how much coverage a person can receive. This is dependent on their income and age.
- If They Want a Smaller Policy
If you’ve got a client that’s only looking for a small policy then it might not be worth going through the cost and time it takes to get an underwritten policy. Younger clients in particular have less time and money. There could be a price difference between the two policies that is so small it doesn’t make sense to take the time to go through with an underwritten policy. If a client born in 1984 needed to have a policy at $100,000 for 20 years then it will cost them around $11 a month for an underwritten policy rather than the $12 a month for a no-exam policy. That is a price difference of less than 10%. Of course the client is the one who will make the final decision, but it’s a good idea to offer a client a no exam policy at this point. While a no medical exam policy might only go up to $400,000 right now things could change in the future with more coverage offered.
- If They are Afraid of Doctors or Needles
There are some people who just hate going to the doctor. While it’s never fun to go through a paramedical exam for an underwritten policy, some people feel that it’s almost akin to torture at the worst, and an unnecessary unpleasantness at best. This paramedical exam can involve blood and urine samples and will often require people to welcome a complete stranger into their homes to have the exam done. Even though these examiners are almost always nice and polite, the exam itself is rarely nice.
There are also people who are just afraid of needles. The most recent reports suggest that this fear of needles affects 10% of American adults. It’s also believed that the actual number is higher. This is because extreme cases go unreported due to how infrequently these people will receive medical attention. These people would see a no-exam life insurance policy as a Godsend. You should ask your clients if there are any problems they would have with being subjected to needles and a medical exam. They often have plenty of reservations about the exam itself so you should let these people know that they don’t always have to undergo a medical exam.
- If it’s Been a Long Time Since they Saw a Doctor
Many advisors have found themselves dealing with clients who hear some bad news after their paramedical exam. This could be anything from a diagnosis of diabetes to an irregular electrocardiograms. In any event the client could count themselves lucky they are learning about these problems now rather than later. The problem is that it causes their insurance policy to be rejected or they may be asked to pay higher premiums. You can protect your clients from this. If it’s been a long time since they saw a physician you should recommend that they apply for a no-exam policy so that they can get coverage within 24-48 hours. You can get started with the underwritten policy while giving them a no-exam policy. You just need to get them some coverage before they take the full exam.
These no-exam life insurance policies are a pretty new policy that are going to give you a valuable weapon on your arsenal of life insurance policies. While some advisors are a little hesitant about offering these no-exam policies because they are often more expensive, it is also the responsibility of an insurance advisor to get their clients life insurance coverage when they need it. While clients might be put off of getting coverage for any number of reasons, it is also the responsibility of an insurance professional to ensure that their clients understand all of their options, including the fact that they may not need a medical exam to get life insurance. There’s never been a better time to offer no-exam life insurance policies to your clients.