Life insurance medical exams can add weeks to the application process and be quite inconvenient. Plus, some people may find them invasive. Life insurance with no medical exam has become an increasingly popular alternative to traditional policies, allowing people to get coverage faster and with less inconvenience.
No-exam life insurance policies offer plenty of benefits to your beneficiaries as well, and some of these benefits are unique to no-exam policies. This article will dive into five ways life insurance with no medical exam can help your beneficiaries:
1. Helps them pay for the policyholder’s funeral
Final expense insurance is a small, no-exam, whole-life policy designed specifically for end-of-life expenses, such as funeral and burial costs. The death benefit is much smaller than traditional policies, usually maxing out around $35,000.
However, funerals tend to cost around $8,000, so final expense insurance offers enough coverage to pay for the funeral with plenty left over for other needs.
2. Assists with end-of-life medical bills
There are many other end-of-life costs besides funerals. One of the most significant can be medical bills related to end-of-life care. A no-exam life policy can help you provide enough to your loved ones to pay for these bills worry-free without having to tap into other assets.
3. Helps build wealth
Many no-exam policies, such as whole life insurance, final expense insurance, and guaranteed issue life insurance, come with a cash value growth component. Part of each premium you pay goes into this component. It grows tax-deferred at a specific rate by policy type.
Once the cash value grows to a certain size, you can withdraw from or borrow against it at low rates and with favorable terms.
You’ll receive the full cash value minus surrender charges if you surrender your policy. That way, you can still use the wealth you have built to help your loved ones if you need to get rid of your policy.
4. Provides helpful riders
You can often purchase riders for your no-exam life insurance policy to provide your beneficiaries with additional coverage. For example, an inflation rider increases your death benefit every year by a fixed percentage, usually 3% to 5%. This prevents inflation from eroding the death benefit beneficiaries receive and can significantly increase the death benefit’s value in times of low inflation.
5. Offers coverage more quickly
The life insurance medical exam is the most time-consuming piece of the application process for traditional life insurance policies. A no-exam policy cuts out these inconveniences and reduces application process time.
Many no-exam insurers can get you a policy within a few days and, sometimes, 24 hours. This can offer significant peace of mind knowing your beneficiaries can get financial protection right away since you don’t have to wait several weeks without coverage to see if you’ll be approved.
The bottom line
Life insurance with no medical exam offers plenty of benefits to your beneficiaries. Final expense policies can help your loved ones pay for your funeral, end-of-life medical bills, and similar costs.
These and other permanent no-exam policies can help you build wealth through the cash value component. You may be able to customize your coverage with life insurance riders for free or at low additional costs. Plus, all these policies take much less time to get — in some cases, you can get one in 24 hours.
Regardless, shopping around is still a great tactic when getting a no-exam policy. By gathering multiple quotes, you can find the lowest rates on the coverage you need.
Sagar Sridhar is an accomplished personal finance blogger hailing from Canada. With a unique blend of quirkiness and enthusiasm, he has established himself as a prominent figure in the personal finance industry. Sagar’s passion for finance, coupled with his engaging writing style, sets him apart from his peers. While he has a background in computer engineering and a Master’s in Project Management, Sagar’s true passion lies in helping others manage their money. His writing has been featured in several top Canadian finance publications, solidifying his status as a sought-after voice in the field. Despite juggling his work and blogging schedule, Sagar remains resolute in his mission to make a lasting impact on the personal finance world.