There Is Life Insurance Without Health Questions, But It’s Always Whole Life
Many companies offer life insurance without health questions (usually called “guaranteed issue” or “guaranteed acceptance”). However, it’s always a whole life policy.
There is not a single life insurance company in the USA that offers a term life insurance policy with no medical underwriting.
You can get term life insurance for hundreds of companies in the nation, but you’ll have to answer health questions to do so.
Why is there no term life insurance with no health questions?
In short, no life insurance companies offer guaranteed acceptance term life insurance because they would lose money (the losses would be significant). There is no path for them to make a profit.
Here is a look under the hood, so to speak, regarding how term life insurance works.
Term life insurance expires after a specific period, such as 10 or 30 years. The insurer is counting on (and they know with mathematical precision via actuarial scientists) that 99% of policyholders will not die before the coverage expires. This is why the cost of term life insurance is so low even for large amounts of coverage.
The very low cost combined with a high death benefit means the insurer assumes substantial risk. To counterbalance that high risk, they must design the underwriting to produce a pool of policyholders that are likely to outlive the policy.
Here are some figures to demonstrate how even a single death among term life policyholders would result in substantial financial losses for the insurer.
A 45-year-old male can get a 20-year term life policy with a $500,000 death benefit for approximately $59 per month. That means the insurer will receive a maximum of $14,160 ($59 × 12 × 20).
At the same time, if that policyholder died at any point during the 20 years, the insurer would be out $500,000. That is a massive imbalance, and the only way to make it work is to ensure virtually nobody dies while the coverage is in force.
Now there are absolutely term life insurance policyholders who do die while the coverage is active. And indeed, that single death results in a significant loss for the insurer.
But keep in mind that insurance is about pooled risk. It’s not about one person per se, but rather what the trend is for a group. So while 1 out of a 100 term life policyholders may die and be a huge loss, the other 99 will not.
The other 99 not dying is what makes it all work and why it makes sense for the insurer to offer the coverage. Here’s a math breakdown to make it easier to comprehend.
- 1 term life policyholder dies= roughly $490,000 loss
- 99 term life policyholders not dying = roughly $1,400,000 gain
If the number of policyholders who died (per 100) jumped from just 1 to 3, then it would no longer work.
Given all of this, term life insurance without health questions would break this formula and result in catastrophic financial losses for the insurance company. That is why it does not exist.
“Term Life No Medical Exam” Is Very Different Than “Term Life Insurance With No Health Questions”
People often confuse “no medical exam life insurance” with the idea that there are no health questions. That is not the case at all.
If you’re looking for term life insurance with no medical exam, you’ll still need to answer health questions.
- No medical exam= must still answer health questions.
- No health questions = no questions to answer, and no medical exam.
Do You Actually Need Life Insurance With No Health Questions?
Most people think they need a life insurance policy without health questions due to their health. Granted, some people want it because of the simplicity of not having to answer any questions and getting immediate approval.
But by and large, most people determine that their health is so bad that there are no other life insurance options they can qualify for.
The truth is that most people can indeed qualify for final expense insurance products that have health questions. That is true even if you have some serious or chronic medical conditions.
Final expense insurance policies are unique in that they are designed to accept applicants with a challenging health history. Now, there are indeed some dire conditions that will result in a denial, such as HIV or Dementia.
However, most major conditions, including heart disease, lung disease, a history of cancer or stroke, and many more, are still eligible for a final expense policy with no waiting period.
Here are the majority of conditions in which a guaranteed issue policy is truly necessary. If you don’t have these, you can probably qualify for a burial insurance policy with health questions, which would result in immediate coverage and a lower cost.
- AIDS or HIV
- Alzheimer’s or dementia
- Terminal illness
- Currently in a hospital, nursing home, long-term care, or skilled nursing facility
- Home health care
- Wheelchair usage due to an illness or disease
- Actively have or are being treated for cancer (excluding basal or squamous cell and certain stage 0-1 cancers)
- Hospice care
- Alcohol or drug abuse (or treatment for either) within the last 24 months
How Does Guaranteed Issue Life Insurance Work?
Guaranteed issue life insurance is coverage that requires no medical exam or health questions. You’re instantly approved because there is absolutely no underwriting of any kind.
All of these policies have a two-year waiting period. During this time, the insurer will only refund your premiums if you die from any natural cause of death. After two years, you’re fully insured, and the full death benefit would pay out for any reason moving forward.
As stated earlier in this article, guaranteed acceptance policies are always whole life policies. That means the premiums will never change, it builds cash value, and the coverage lasts forever.
In nearly every case, the most guaranteed issue coverage you can buy from any particular company is $25,000. However, you can always buy multiple policies (from different providers) if you want coverage beyond $25K.
How Much Does Guaranteed Issue Life Insurance Cost?
The cost of life insurance generally depends on multiple variables (such as gender, age, health, etc.). However, because guaranteed issue final expense life insurance plans have no underwriting, the cost is based solely on age, gender, and coverage amount.
Best Companies For Policies Without Health Questions
Below are three of the best burial insurance companies that offer plans without health questions.
- $10K Policy Cost$55.00/month*
- New Applicant Ages45-85
- Death Benefit Options$3,000-$25,000
- 2-Year Waiting PeriodYes
- $10K Policy Cost$41.01/month*
- New Applicant Ages45-85 (50-75 in NY)
- Death Benefit Options$2,000-$25,000
- 2-Year Waiting PeriodYes
- $10K Policy Cost$48.00/month*
- New Applicant Ages45-85 (varies by state)
- Death Benefit Options$3,000-$20,000
- 2-Year Waiting PeriodYes
Our Insurance Review Methodology
Every company we review has an overall score that illustrates how well it stands out in the market relative to its competitors. These scores are not subjective. Instead, we utilize a defined 5-star scoring system that applies a weighted average of particular factors, all of which are outlined below and on our review methodology page.
Coverage
Strength
Complaint Index
Hold Time
We measure the price of a company’s most popular policy relative to its competitors’. The closeness of their cost to other companies determines the final score. Read a full breakdown of the price of coverage factor on our review methodology page.
Coverage
Coverage
Strength
Complaint Index
Hold Time
This factor assesses whether a company offers immediate coverage and, if so, how difficult it is to qualify for it. Read a full breakdown of the no waiting period coverage factor on our review methodology page.
Strength
Coverage
Strength
Complaint Index
Hold Time
A company’s financial strength is based on its rating with A.M. Best. Read a full breakdown of the financial strength factor on our review methodology page.
Complaint Index
Coverage
Strength
Complaint Index
Hold Time
The National Association of Insurance Commissioners’ complaint index measures an insurer’s frequency of consumer complaints compared to the rest of the market. The score the insurer receives is based on how it stacks up to the median score of other insurers. Read a full breakdown of the NAIC complaint index factor on our review methodology page.
Hold Time
Coverage
Strength
Complaint Index
Hold Time
The customer support hold time score is based on the average amount of time it takes a company to connect an existing policyholder to a human customer service agent. Read a full breakdown of the customer support hold time factor in our review methodology page.
Why trust Choice Mutual?
When we review products, our findings are unbiased and free of any influence from partnerships or methods of compensation. All findings, good or bad, are solely the derivative of our objective analysis of any given product or company.
As noted on our review methodology page, our researchers evaluate the financial stability of the insurer, policy costs, product limitations, state availability, customer satisfaction, waiting periods (if applicable), and other relevant factors. We aggregate all this cumulative data to develop objective overall scores based on predefined weighted factors.
In addition, a qualified expert who is well-qualified to speak on the matter will provide opinion-based feedback about the company or product being reviewed.
For over a decade, Choice Mutual has been an insurance agency specializing in final expense life insurance. Our expertise in this type of insurance is well documented in numerous authoritative publications, some of which are listed below:
Choice Mutual’s mission is to provide consumers with unbiased, expert commentary and explanations of the topics under discussion. We want our readers to be armed with information and tools not found anywhere else on the internet, so they can make an informed decision.
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- Nationally licensed life insurance agent with over 16 years of experience.
- Personal annual production that puts him in the top .001% out of all life insurance agents in the nation.
Anthony Martin is a nationally licensed insurance expert with over 16 years of experience and has personally served over 10,000 clients with their life insurance needs. He frequently authors entrepreneurial and life insurance content for Forbes, Inc.com, Newsweek, Kiplinger, and Entreprenuer.com. Anthony has been consulted as an expert life insurance source for dozens of high-profile websites such as Forbes, Bankrate, Reuters, Fox Business, CNBC, Investopedia, Insurance.com, Yahoo Finance, and many more.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
Choice Mutual often cites third-party websites to provide context and verification for specific claims made in our work. We only link to authoritative websites that provide accurate information. You can learn more about our editorial standards, which guide our mission of delivering factual and impartial content.
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actuarial scientists. https://www.morgan.edu/actuarial-science/prospective-students/what-is-actuarial-science
