No-Exam Term

No-exam life insurance: no needle, still questions

Yes. Many carriers now issue term and whole life without a paramedical exam by using your application answers, prescription history, motor-vehicle record and other data, often for coverage up to $1 million or more for healthy applicants under about 60. You still answer health questions. Only guaranteed issue policies skip the questions, at a higher price and with a graded period.

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At a glance

What is skipped: The paramedical exam (blood, urine, measurements)
What is not skipped: Health questions, prescription check, MVR, identity and sometimes medical records
Typical limits: Up to $1 million to $3 million for healthy applicants in their 20s to 50s; lower at older ages
Speed: Decisions in minutes to days instead of weeks

“No exam” does not mean “no health questions”

Most no-exam policies still ask health questions and check your prescription history and, with your permission, records such as a motor-vehicle report. Answers must be accurate; a misstatement discovered within the contestability period (usually two years) can void the policy. Only guaranteed issue policies skip the questions, at a higher price and with a graded period.

How accelerated underwriting decides

Carriers combine your answers with third-party data: prescription databases, motor-vehicle records, the MIB (an insurance industry information exchange), and sometimes electronic health records or credit-based mortality scores. If the data agrees with your answers and the risk is clear, the policy is issued without an exam. If something needs clarifying, the carrier may request an exam or records; that is not a decline.

Who tends to qualify, and who is routed to an exam

Usually qualifies: ages 18 to 60, normal BMI, no tobacco, no major diagnoses, amounts within the program limit
Often routed to an exam: higher amounts, older ages, recent diagnoses, pilot or hazardous activities, inconsistencies between answers and records
Not eligible: applicants who would be declined with an exam are usually declined without one too; the process changes, the underwriting does not

No-exam term vs. simplified issue vs. guaranteed issue

No-exam term at full underwriting standards is priced like traditional term. Simplified issue (common in final expense) asks fewer questions, has lower limits and costs more per dollar. Guaranteed issue asks nothing, costs the most and has a graded period. Knowing which of the three you are being offered is the most important question to ask.

Common questions

Is no-exam life insurance more expensive?

Not necessarily. Accelerated underwriting programs from major carriers price the same as their exam-based term for applicants who qualify. Simplified issue products with fewer questions and lower limits do cost more per dollar of coverage.

Can I lie on a no-exam application?

No. Answers are checked against prescription and other records, and a material misstatement discovered within the contestability period (usually two years) can void the policy. Accuracy protects your beneficiary.

Is the death benefit taxable?

Life insurance proceeds paid because of the insured’s death are generally not included in the beneficiary’s gross income for federal tax purposes. Interest earned on proceeds left with the insurer can be taxable. A tax professional can address your situation.

Is AskLily an insurance company?

No. AskLily is an education and referral service. Lily, our automated assistant, helps you understand options and, when you ask, connects you with a licensed independent insurance professional. AskLily does not sell, bind or underwrite coverage.

Does it cost anything to talk to Lily or a licensed professional?

No. There is no fee to use AskLily, ask Lily questions, or speak with a licensed professional we refer you to. If you decide to apply for a policy, you pay premiums to the insurance company that issues it.

Talk it through with Lily

Ask what this means for your situation. When you want numbers or an application, Lily connects you with a licensed independent professional.