New No Medical Term Life Policies
Is no exam life insurance a new thing? If you read some of the writings on the subject you would think it is. The fact is that the idea is not new at all. Life insurance companies have been issuing policies on a non medical basis for a very long time. The reason is that they can hold down costs by doing so. You may ask how can a life insurance company achieve lower expenditure by issuing a no exam life insurance policy. Let us try to get the thinking of the decision makers in these companies.
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- What Does It Normally Cost To Issue A Policy?The first thing we have to consider is the life insurance agents commission. In many companies that can be more than the first years premium. The life insurance company has to pay administrative staff and clerical staff. The efficient companies break down the cost and determine what miniscule percentage is applied to each actual policy. They must do an inspection report. In other words they have to check out the applicant. If they need to have a medical done they have to pay a nurse, a para-medic or a doctor to do this examination. They may need an xray and blood work in addition to the actual medical depending on what the examiner uncovers. In some cases a second or third medical examination may be needed.
- People Are Living Longer TodayThe life insurance companies, after much research and after watching trends over a long period of time, have come to the conclusion that people are living longer today than ever before. The no medical exam life insurance policy has become common practice under certain conditions.It used to be that young people would get most or all their insurance without needing a medical. The obvious reason is that they would more than likely have a long life ahead of them. People up to age 50 or 55 would qualify for some no medical exam life insurance but usually a smaller amount than the 20 year old. The reason is the shorter life expectancy.Today people are living longer thus the life insurance companies can extend the availability of no medical life insurance to age 65. People take better care of their health and as a result more life insurance is approved at older ages.The life insurance companies have eliminated much of the cost for issuing a policy. Clerical and administrative cost still exist but the cost of doing an examination is eliminated. An inspection report is still required. For some of those companies issuing no exam life insurance policies based on an online application the agents commission is eliminated. We can only conclude that this new way of doing business is a good deal for all concerned, the life insurance company and you the buyer.Let us be absolutely clear on one thing, these policies cost the consumer no more online than had you bought them from an agent.
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