Term vs Whole Life Insurance

No Exam Term Life Insurance

What is no exam term life insurance? Well it is basically exactly as it sounds; it is term life insurance that you do not have to take an exam to purchase.

Most often, individuals who want to acquire term life insurance must take a health exam. This is either done by going to a local or clinic or having a nurse come by your home and administering the test there. When you purchase no exam term life insurance you do not have to go through the trouble of giving blood or any other troublesome procedures.

What you may end up doing though is paying a higher premium for not taking an exam. Life insurance works by assessing risk (from multiple factors), and then applying a premium according to that risk. When an individual does not take a health exam, the insurance company does not have the personal information necessary to make an informed risk decision. Therefore a higher premium on the term life insurance policy is a way to hedge against loss. This works in much the same way as does guaranteed issue life insurance.

Before you purchase a no exam term life insurance policy you must ask yourself some questions.

1. Do I need insurance?

Sometimes individuals purchase insurance or want to purchase insurance that do not even need it. This is a large discussion that I will not cover in this article but is definitely a question you must think about before you make the purchase.

2. Can I pay the premium?

As mentioned before, the premiums on no exam term life insurance policies are going to most likely be higher on these policies than they would on your typical term life insurance policies that require you to take an exam. If you do not have the income to keep up with the premium payments for the foreseeable future you are essentially throwing money out the window that you could have invested.

3. What are my other options?

If you have other options available to you make sure you explore them fully before making a decision. If your employer offers you life insurance already you might have the option of buying multiples of your salary. If you do have this option, it will most likely be a much cheaper option and is definitely worth a look.

Many insurance companies offer no exam life insurance policies, but individuals must be careful to not fall for slick sells pitches and other tactics that aim to buy products that are not best suited to their lives. No exam term life insurance is for some people a good idea and can give their family financial security when needed, but it is very important to seek out all options before making any kind of purchase.