The Logic Behind Term Life Insurance with No Health Questions

As people enroll in life coverage, they often have to go through a long drawn out process which involves medical exams and a lot of paper work. In the midst of all this, people do not realize that there are policies available such as term life insurance with no health questions, where one does not have to go through medical examination.

Some policies require an applicant to be in perfect health at the time of issuance of the coverage. The insurance company wants to makes sure that the applicant does not pose any risk to the company.

Many people live with the uncertainty that they may not be accepted as they may not be able to clear the medical or physical examination for the policy they want to enroll in. But in the case of term life insurance with no health questions this hesitation and uncertainty is eliminated The coverage is issued almost instantly.

Understanding the logic behind term life insurance with no health questions

Many people may wonder why an insurance company may insure a known risk. You can easily understand the logic behind all this by going through some of the basics of term life.

The risk in term life insurance is spread among a large number of people by pooling the money invested by all the insured. This means that as a person purchases term coverage or any insurance, the risk that a couple of people will die in a group of more than hundred insured people is minimal. In simple terms, the probability that all the people in the group will claim is almost equivalent to nil.

Combining the provisions of a term and the concept of risk pooling, an insurer does not expect that all or a large number of people will expire simultaneously or the within the time frame of the policy. In majority of the cases, insured people outlive the term of the policy or the term of the insurance plan they are covered in.

With the probability of people outliving the term of the policy being so low, they are at a negligible risk. This is why companies are willing to enroll people in term life insurance with no health questions.

Other Benefits apart from Medical Exemption

Though this plan is not perpetual like those of whole insurances, term life insurance with no health questions has its own benefits:

  • Quick Turnaround: Insurance providers that do not ask for medical examination usually issue coverage within 24 hours.
  • No need to visit a doctor’s office: scared of getting your blood drawn or shots? Than the best option available to you is no health questions term life insurance.
  • The coverage is provided only for the time until it is required. Some of the popular examples include people who wish to buy travel insurance, people who are already senior citizens , or mortgage redemption one, etc.
  • They provide a considerable amount of benefits or coverage at cheaper or smaller premiums.
  • There are other beneficial features attached with term life insurance no health questions like in case of instant death there is a financial provision, covering  medical expenses.

Types of Term Life Insurance with No Medical Questions

As mentioned earlier, these plans are issued much faster than other forms of coverage. Here are some different forms that exist:

  • Guaranteed Acceptance/Issue Life Insurance – The applicant is not required to answer any question related to health. The policy is quick and easy.
  • Life Insurance with Graded Benefit – This type of coverage includes some basic questions related to health. The biggest drawback of these policies is when something happens to the insured person in the first two years after the policy is issues. The beneficiary does not get the full payment. The person only receives the premium deposited by him or her along with a set interest rate.
  • Simplified Issue Term Life Insurance No Health Questions – under this coverage an applicant is required to fill out the application form providing full details of his or her past and present health condition. There is an underwriting process before the application is accepted, but a medical examination is not required.