Life Insurance: Why Do I Need a Medical Exam?

 

When applying for a Greensboro life insurance policy, part of the underwriting process may be for you to submit to a medical exam.  Not all life insurance providers require applicants to undergo a medical exam as part of their underwriting prerequisites and some insurers even offer "no-exam" life insurance issuance.

For a "no-exam" policy, however, you'll be required to pay a greater premium amount than those charged for a standard life insurance policy.  Sometimes the cost can be as much as double.  The reason for the additional cost is because an insurer is taking on additional risk when they write you a policy without knowledge of your health history or your current state of health.  These policies may also have limited coverage options and include a waiting period of up to two years before payment benefits are available.

Getting Greensboro Life Insurance Without Getting a Medical Exam

In line with all types of insurance, the cost of a life insurance policy is proportional to the amount of perceived risk being taken on by the insurer.  The underwriting process your insurer goes through to determine whether a policy should be written and, if so, the amount of premium to charge for a particular policy involves figuring the relative amount of risk being insured.  With life insurance, the purpose of a medical exam is to provide your insurer with an in-depth snapshot of your health status.  

The results of the exam combined with the answers you provide on your insurance policy application should allow your insurer to determine which risk class you fall into.  These classes include:

• Preferred Plus
• Preferred
• Standard
• Substandard

The better your risk class, the healthier you are presumed to be, with a greater life expectancy, translating to lower premiums for your policy.

There are several ways of obtaining a life insurance policy without taking a medical exam and without going the more-expensive "no-exam" route:

Simplified Issue Life Insurance - this includes a health questionnaire that provides a general sense of your health.  The standard upper limit for death benefits on this policy is $500,000.

Guaranteed Acceptance Life Insurance - also known as guaranteed issue or final expense insurance, this policy is often used to pay burial and other end-of-life costs and is typically available limited to $50,000 or less.

Group Life Insurance - typically offered by your employer as part of a benefits package.  Benefits are generally low.

Can You Ever Have Too Much Insurance?

 

Some insurance is essential, but it's important to buy the right types of coverage and the proper amounts.  Some insurance is required by law like vehicle liability coverage, while some protection is required by a lender such as the mortgage lender for your home loan.

Life insurance, which isn't usually required by anybody but highly recommended for everybody who has others depending on their income has two ways of costing too much:

1. Buying a policy with a death benefit that's too large.  The purpose of most life insurance policies is to make sure that, if you suffer a premature death, your family will have enough money to maintain their previous standard of living after covering funeral costs, college tuition for the kids and outstanding loans like those for cars and your home mortgage.  The aim isn't to suddenly make your family wealthy upon your passing, but to maintain their lifestyle.
2. Buying insurance for longer than needed.  Once the kids are out on their own, your home loan is paid off and you've retired, living on retirement income, your life insurance needs will be much different than when you were young with a growing family.

At this point, keeping the same amount of coverage could constitute over insuring yourself.  Contact your Greensboro insurance agent to go over your current life insurance needs.

 Too Much Car Insurance

If you drive a car, you're required by state law to have at least a minimum amount of liability insurance.  When you look at the numbers, 30K/60K/25K, you'll see that these minimum amounts are significantly lower than what you'd need after having a serious "real-world" accident for which you're held legally responsible.  If you have only minimum required amount of liability car insurance, you're likely well underinsured.

If you continue to carry full comprehensive coverage on an older, low-value car, you could be wasting your money.  If you could easily replace the vehicle if it were to be stolen or wrecked, the amount of premium you pay compared to the amount of a settlement may not be that much different.  In that case, you're likely over insured.

Homeowners Coverage

Your Greensboro insurance agent is happy to review your coverages to ensure you're properly covered.  Review your homeowners policy every couple of years to ensure adequate protection.  Protection for your home's structure should cover the cost of rebuilding, not its market value.