How does a life insurance company underwrite a life insurance policy with no exam?
By not requiring an exam, blood, or urinalysis an insurance company has to rely on other ways to determine if an applicant is insurable. In addition to the more obvious things such as age, height and weight, health questions, and smoker status there are additional resources that insurance companies will use. These will normally include…
- Motor Vehicle Report (MVR)
- Medical Information Bureau (MIB)
- Medical records from your Physician
- Prescription Drug Database (Milliman IntelliScript)
Life insurance with no medical exam can be purchased as temporary (term) or permanent life insurance (whole life). The definitions of these two general classes of life insurance are:
- Simplified Issue can be purchased as either term or whole life, and you will be required to answer medical questions. Medical records may be required by the insurance company. In addition, information from the MIB, MVR, and RX database will be obtained for the purpose of underwriting your life insurance application.
- Guaranteed Issue Life Insurance requires that you only answer a few medical questions. Medical records are normally not required and your acceptance is based upon your answers to these questions. This type of policy is typically issued to the senior market, or to people that are generally uninsurable by traditional standards.
Because life insurance companies do not have the benefit of knowing what a full exam with blood work would reveal they assume a greater risk. Therefore life insurance coverage with no exam comes with higher premiums.