Some people don’t understand how you can buy term life insurance with no medical required.
They are under this illusion that in order to issue such policies the premiums have to be higher than the norm.
They may be in some cases but the policies that really sell have very competitive premiums.
In these cases the average premium is much lower than comparable term policies. How can the insurance companies do this.
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The answer is really simple, the underwriting is real tough. After you go through their underwriting process you realize that if you had seen an agent you would have a better chance of being approved. Let us look at buying online without a medical compared to having an agent visit with you.
Buying Life Insurance The Traditional Way
The licensed agent calls you and sets up an appointment. If he knows what he is doing he asks you a lot of questions in order to get a feel of what your needs are. He illustrates the rates and the amount of coverage then gets to the application.
If there is any medical problem indicated he probes a little more so that he can give the underwriter as much information as possible in his report. The underwriters know their agents, they know which ones they can depend on.
The agent completes the non medical form if called for or sets up an appointment with an examiner, whether it be a doctor or paramedic or a nurse.
Because of the face to face interview the agent has sufficient information to discuss the case with the underwriters. After the medical is done more information may be uncovered. In some cases this is a positive and in others it is a negative.
More often than not a policy is issued even if a rated one. A small percentage is declined.
Buying Term Life Insurance With No Medical Required
As I indicated before the underwriting is tough. The online companies are not equipped to do get the reports that the agent would get. Even if they asked for an attending physicians report it may take so long the applicant may have changed his mind by then or bought elsewhere.
The online carriers depend on the M.I.B, Medical Information Bureau, but this information may be inaccurate. This could result in a policy being declined or one being issued that shouldn’t be issued.
They also depend on a Pharmacy Report which may cause the applicant to be declined. They may have had a temporary health problem and used the type of medication that may be used for other more serious conditions.
Here is an example. I know someone who had unceasing hiccups for about 2 weeks. The medication described was one that is commonly used for people with mental conditions. The online underwriters would assume that this person has had a mental problem.
They would be dead wrong but the policy would be declined based on their incorrect assumption. Online carriers don’t rate policies, they either issue them in the category they think you may fall in or they decline the policy.
Another problem that buying term life insurance with no medical online may expose you to is if you feel you want to replace a policy you now own. A “yes” to the replacement question will also get your policy turned down simply because online carriers don’t provide the forms required by the state for such a transaction.
Buying term life insurance with no medical online may be the simple way to go but many perfectly qualified people are being turned down as this fairly new process develops. I look forward to the day when most applications are completed online even if the applicant has to do a complete medical thereafter.