Best Life Insurance Policy For Preexisting Conditions [With No Exam]

You’ve got life insurance questions, and we’ve got the answers!!  Can I get life insurance with a preexisting condition?  Yes, you certainly can.  You may have more options than you have been led to believe.

In this post, we are going to focus on the policies that are least likely to decline you if you have a medical condition or conditions.  These policies are all no exam policies meaning no one will come to your home to test you.

Traditional, full medical underwritten policies with an exam are going to be the least expensive, but for some people, they aren’t the solution they are looking for or need.

Maybe you just need a smaller amount of whole life insurance or have a very serious health condition.  If that is the case, you will like this read because it provides the info you need to move forward in your quest.

No Exam Life Insurance

Guaranteed Issue Life Insurance and its less expensive sidekicks, Graded Benefit Life Insurance as well as Simplified Issue Life Insurance, are the products I will be talking about in this post.

For some people, a major personal obstacle to obtaining quality life insurance coverage is the medical exam that they must satisfy to get a policy issued.  Yes, a traditional life insurance policy does require the applicants to go through a paramedical exam (paid for by insurer or insurance agency) in their home so that the insurance company can make an assessment of the risk involved in covering the insured.

Why the paramedical exam if you go to the doctor for regular checkups and feel fine?

Well, the insurer has to verify that as of the date you are applying that your health is acceptable to their underwriting standards and:

  1. Whether or not to offer the coverage for the insured (could be you or another individual) and if so;
  2. The appropriate premium to charge (based on the results of the paramedical exam)

In some cases, a medical exam may work against you.  Further, if you just don’t like the idea of having a medical exam in your home, then the next three options are for you.

There are some common types of insurance coverage created by the life insurance industry that do not require a medical exam at all.  They are Simplified Issue Life Insurance, Graded Benefit Life Insurance and Guaranteed Issue Life Insurance sometimes called Guaranteed Acceptance Life Insurance.  With that said, we will now break down these two products and explore the pluses and minuses among them.

Simplified Issue Life Insurance

A Simplified Issue life insurance product would be recommended if you can fit the less restrictive or “simplfied” medical underwriting guidelines of the life insurance product and company which you are applying.  These products are often intended for people in or near their senior citizen years.

The Standard Questions Asked When Applying for Simplified Issue Life Insurance

The following are the typical Simplified Issue Insurance applications.  Yes, just these 14 basic questions.

  1. During the past 12 months, have you been admitted to or confined to a hospital 2 or more times?
  2. During the past 12 months, have you received a diagnosis which would lead to surgery or admission to a hospital or nursing facility?
  3. During the past 12 months, have you been confined to a nursing facility or received home health care?
  4. During the past 24 months, have you had a stroke, heart attack, or any procedure to improve circulation to the heart or brain?
  5. During the past 24 months, have you had or been recommended to use oxygen for any respiratory disease?
  6. During the past 24 months, have you received or been recommended to have kidney dialysis?
  7. During the past 24 months, have you had or been treated (including medications or surgery) for melanoma or internal cancer?
  8. During the past 24 months, have you had or been treated (including office visits, medications or surgery) for the following:
  • Alzheimer’s disease or any neurological disorder?
  • Leukemia?
  • Liver Disease, renal insufficiency, or kidney failure?
  • Irregular heart rhythm or congestive heart failure?
  • Alcohol and/or drug abuse?
  • Diabetic complications, including diabetic nephropathy, retinopathy, neuropathy, diabetic coma, insulin shock, or uncontrolled blood sugars?
  • Chronic obstructive pulmonary disease (COPD)?

If you can give a honest answer of “NO” to each all of these questions without sugarcoating, you qualify for full benefits upon issue and should be accepted.

These sample application questions above are many years old from a small, mutual life insurance company that is fairly particular about who they make offers to.  Some carriers have small variations of these questions.

Pros/Benefits of Simplified Issue Life Insurance

  • No medical exam
  • Obtain coverage in days or weeks compared to even months with other insurance coverage
  • Full face amount (death benefit) is available immediately upon policy issue
  • Less costly than graded benefit or guaranteed issue life insurance

Cons/Risks

  • High premiums compared to traditional life insurance products, sometimes 2-4 times higher than other life insurance policies.  Simplified Issue has higher risk due to limited health questions to screen you or another as the insured.   Higher risk equals higher premium.  That is the nature of the insurance business.  Only way it can work.

Graded Benefit Life Insurance

Graded Death Benefit Insurance is “step down” from Simplified Issue, “Senior Life Insurance.”  It does have very limited health questions.  Typically, a couple in fact.  It is also a no medical exam policy designed to be easy to qualify for.

The Standard Questions Asked When Applying for Graded Benefit Life Insurance

  1. Have you been diagnosed with a terminal illness or are you currently hospitalized, confined to a nursing home, hospice, bedridden or receiving home health care?
  2. In the past 10 years, have you been diagnosed by or received treatment from a member of the medical profession for Acquire Immune Deficiency Syndrome (AIDS); AIDS Related Complex (ARC); or tested positive (through the use of an FDA-licensed test) for the Human Immunodeficiency Virus (HIV)?

If you can give a honest answer of “NO” to each all of these questions without sugarcoating, you qualify for full benefits upon issue and should be accepted.

These sample application questions above are many years old from a small, mutual life insurance company that is fairly particular about who they make offers to.  Some carriers have small variations of these questions.

Pros/Benefits of Graded Benefit Life Insurance

  • No medical exam
  • Only a couple of medical questions to qualify
  • Obtain coverage in days or weeks
  • Less costly than guaranteed issue life insurance
  • Full coverage upon issue for accidental death
  • Will accept many difficult to insure medical conditions

Con’s/Risks

  • More expensive than standard simplified issue
  • Limited Death benefit for the first 2-3 years for natural death

Graded Benefit Life Insurance is designed typically for people in or near their senior years who have a significant amount of medically diagnosed health problems leading to a difficult to insure situation.  Some policies extend down much lower age.  The life insurance company who supplied the health questions above is and example.  Don’t assume you have to be a senior to apply.

Why do life insurance companies offer graded plans?  First of all, they want your business, but know that many people are very risky to them and they will be responsible to pay out benefits from day one after issue.

Since the life insurance company cannot be sure based on medical history or lack of medical history questioning, they offer graded benefit coverage which allows you a chance go thru a “waiting period” to obtain full benefits and lowers there risk overall.  Remember now, during the waiting period, the life insurance company will not pay the policy beneficiary the full benefits (death benefit/face amount) if death occurs due to natural causes.  Once the insured passes the waiting period, full benefits are paid out.  One the positive side, if death occurs due to an accident, the policy will pay out the full face amount upon issuance.  For the first 2 or 3 year waiting period (insurer dependent time), the beneficiary of the policy will receive all premiums paid in plus a guaranteed interest rate usually capped at 10%.  The waiting period (partial benefits) and the interest rate are dependent upon each insurance company and what they offer at application time.

Guaranteed Issue Life Insurance

Just like a Simplified Issue Life Insurance Policy, there is another product in the insurance industry called Guaranteed Issue Life Insurance.  It requires no medical exam.  The major difference and unlike simplified issue life, there are no medical questions to answer.  In other words, if you pay the premium the company is “guaranteed” to issue a policy.  Since the insurer will accept people regardless of health you can expect this to be the most expensive type of life insurance.  This is high risk life insurance, period.  Like the Graded benefit option, a major drawback is that there will be a  “waiting period” for full coverage on death due to natural causes.  Specifically, the full death benefit is not available until after the policy has been in force for a given amount of time, usually two to three years. In the insurance industry, this is also called a graded benefit. In some cases, if the insured person dies within 2-3 years of purchasing the policy, then the beneficiaries only get refunded the premiums paid up to that point.  Many companies will return all premiums plus interest, which is usually about 10%.  After 2 or 3 years, depending on the carrier, the full value of the policy would be remitted to your beneficiary.  Full benefits for accidental death claims are honored from day one of acceptance.

Pros/Benefits

  • No medical exam required
  • No medical questions to answer
  • You are guaranteed to be covered by a life insurance policy

Cons/Risks

  • “Waiting Period” – if the insured person dies within a specified amount of time ( 2-3 years dependent upon the insurer), they will only get a portion of the death benefit or a portion of their premiums paid will be returned
  • As a rule, the most expensive life insurance you can buy per thousand

Quick Facts To Think Thru

  • Designed to pay for funeral/burial or final expenses which is why the policies are small amounts
  • Often offered to those 45-85 years old
  • Smaller death benefit amounts (range from $5,000-$100,000) compared to most life insurance policies
  • Healthy individuals don’t usually choose guaranteed issue life insurance because there are other less costly options
  • Company does not know how healthy you are; that’s why it is more expensive.  They are limiting their risk exposure.
  • Typically a “last resort” life insurance policy if you can’t get insurance elsewhere

The Take Home Here… Before Decision Time

Guaranteed Issue Life Insurance, Graded Benefit and Simplified Issue Life Insurance are usually considered by individuals who are between 50-85 years old and have some significant health issues.  Most often, it is used by those in or entering their senior citizen years.  Sometimes health issues that make obtaining traditional life insurance challenge.  No exam coverage to the rescue.  Than again, maybe you don’t want to have nurse visit your home to conduct a paramedical exam?  That is your business and we respect that.

At Special Risk Life, we do however recommend traditional, fully underwritten life insurance if your health permits.  It just saves you hard earned money, period.  We are quite adept at providing even traditional solutions for all kinds of medical conditions including diabetes among many others.   One of our goals is to help you determine whether a standard, traditional solution is a good path for you or not.  It costs nothing to speak with us about your situation.

If you would rather not have a medical exam, we provide another strategy with less hassle.  Some people just don’t like needles.  Remember to at least try to qualify for Simplified Issue life insurance, since it is less expensive than Graded Benefit life or Guaranteed Acceptance/Issue Life Insurance and you will have full benefits upon acceptance.  You can even do this online with our instant Final Expense Quote calculator/widget on this page.  It quotes the companies that offer full benefits from day 1 of policy issue.

If you are ineligible for simplified issue due to the health question responses, then consider Graded Benefit coverage.  If you are in a real pinch health wise, look to Guaranteed Issue if under age 80.  We do not recommend guaranteed issue life insurance at any age above 79.  It becomes very expensive and advise you to consider self insuring by saving the premiums you would be paying in a separate account.  Premiums at that age are large for Guaranteed Issue and will accumulate quickly in a bank account.  A prepaid burial would be another option, but tucking it away would be a safer bet and still working for you financially.

 Wrapping Up

The best life insurance insurance policy for preexisting conditions is going to be dependent on a number of factors including your age, overall health, amount of coverage needed and what the goals of the policy actually is.  I strongly suggest talking to a independent life insurance agent when considering any life insurance policy especially if you are not in excellent health.  Getting the best life insurance policy for preexisting conditions can be confusing and frustrating.  Life insurance is very personal and what is good for the goose isn’t necessarily good for the gander.

This isn’t simple 20 year level term life insurance anymore.  It will be easier to discuss the product/policy before applying.  That way you get all of your questions answered and you understand all the terms and any limitations before you sign on the dotted line and start paying the premium.

If you have any questions about Guaranteed Issue, Graded Benefit or Simplified Issue Life Insurance, feel free to ask below in our comment section or just simply call.  We don’t bite either.  We’ll do our best to help you better understand your options and which might be best for you.  800-598-6445

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