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The 4 Types of No Exam Life Insurance Policies

Explaining the different types of no exam life insurance policies available

There are 4 main types of life insurance policies that fall under the “no exam” umbrella.

None of them require a medical exam. However, they are very different from each other and each type fills a specific need.

These policy types are:

  1. Simplified Issue
  2. Guaranteed Issue (also known as Guaranteed Acceptance)
  3. Graded Death Benefit
  4. Final/Burial Expense

1) Simplified Issue

Simplified issue is term life insurance that has been made easier and “simplified“. The application, underwriting, and approval process are designed to be much quicker and less painful.

red sign showing simple and complicated options for life insurance without taking an exam

This type of policy has been increasing in popularity and availability over the last few years. Simplified issue term policies are typically exactly the same as their “take the exam” counterparts, you just don’t take the medical exam.

How it works:

Insurance carriers permit the easier underwriting process for certain health classes and up to certain coverage limits. There IS still underwriting. You may pay slightly higher costs for the privilege of skipping the exam.

What they check:

  • (Medical Information Bureau) – A database service that records health information from previous life insurance applications.
  • Rx database (Pharmacy Report) – Prescription database telling what medications you have taken.
  • MVR (Motor Vehicle Records) – Your driving record with history of moving violations, DUI/DWI, reckless driving, etc

Depending on the insurance company and the individual applicant, they may issue a decision immediately. Sometimes within minutes.

Other companies will want to do a phone interview and/or request medical records from your doctor to review. You may see this referred to as an APS (Attending Physician Statement).

This lengthens the process but will still be much faster than a traditional policy where you have to schedule and take the medical exam. Then wait for lab results to be analyzed.

Is a good fit for:

  • People in at least average health
  • People needing coverage amounts greater than $50,000

2) Guaranteed Issue 

Everyone is approved. Like the name says, it’s guaranteed. Fill out the application, make your first payment, and you are approved for a life insurance policy.

Sounds pretty awesome?

You will pay for this. The premiums are much higher than all other types of life insurance. Since the insurance company literally knows NOTHING about you, they need to charge a much higher rate to takeGuaranteed approval on a no medical exam life insurance policy means higher premiums on the much higher risk.

The rate you pay will be based on your age, gender, and state of residence. Everyone is lumped together and there are no health classes since no health information is known.

How it works:

In addition to the higher premium costs, there is a waiting period. This is typically 2 years. What this means is that if you die in the first 2 years, your beneficiary does NOT receive the death benefit payout.

With ZERO questions or underwriting, the insurer needs a little extra buffer or else you could purchase this policy on your death bed with just days to live. You make 1 premium payment, pass on, and then they are supposed to pay out thousands of $$?

Um no, I don’t think so. 

That would never work for a business that is trying to be profitable.

If the insured does die within that waiting period, all premiums that were paid in plus interest are given to the beneficiary.

If the insured dies AFTER the waiting period, the full death benefit is paid as agreed.

What they check:

Nothing. It’s guaranteed. There are no health questions.

You must be in a certain age bracket, typically up to age 85 although this can vary depending on which company you apply with.

Is a good fit for: 

  • People that have a serious medical condition that prevents them from getting any other kind of life insurance.
  • People that need a short-term bridge of insurance until they can qualify for a less expensive policy. Examples include waiting for more time to pass after recovery from a heart surgery, serious stroke, or cancer.
  • People that don’t need more than $25,000 in coverage.

orange warning sign Always look into Final Expense and Graded Death policies before settling on Guaranteed Issue. If you are able to answer and pass a few health questions, you will get a lower rate.

Guaranteed Issue should be saved as the last resort when you can’t qualify for anything else. A good independent broker can help guide you through the options. Contact our office with any questions.


3) Graded Death Benefit

Graded Death Benefit insurance is very similar to  Guaranteed Issue (GI) insurance and often times interchanged.

There are a few significant differences:

A) Some health questions

Typically a graded death benefit policy will have as few as 3-4 questions or as many as 10-12 questions depending on the insurance carrier. In order to be approved, you must “pass” all these questions by answering “No”.

Common questions may include:

  • “Do you have AIDS or HIV?”
  • “Are you currently residing in a hospital, hospice or long-term care facility?”
  • “Have you been diagnosed with a terminal illness?”

green money iconEvery company will have slightly different questions. The secret to finding the lowest rate is applying at the one that fits YOUR unique situation.

You want the company that has as many questions that you can say “Yes” to. But without any that disqualify you. We understand the details of each company and their questionnaires. We are able to steer our clients to the lowest rates, EVERY time.

B) Phased in death benefit 

Instead of a complete waiting period that must be exhausted before any death benefits are paid, a graded policy might go something like this:

  • Death in year 1 = 25% of death benefit paid
  • Death in year 2 = 50% of death benefit paid
  • Death in year 3 and beyond = 100% of death benefit paid

Some companies may have 3 years of graded benefits before the full benefit is eligible in year 4.

C) Less expensive

Graded death benefit policies are still very expensive compared to traditional policies. They are however less expensive than guaranteed issue insurance because there are at least SOME health questions for qualification.

D) Higher coverage amount

Graded policies will have a slightly higher cap on coverage amounts than guaranteed issue. Typically $50,000 for Graded vs $25,000 for Guaranteed.


4) Final Expense Insurance

You may see this referred to as “Burial Insurance” or “Senior Life Insurance”. They are the same thing.

Final expense insurance has a different coverage objective than all other traditional life insurance. Final expense insurance has a different coverage objective than all other traditional life insuranceRegular life insurance is designed to protect against an early or unexpected death. Final expense coverage is designed to cover the EXPECTED costs associated with death.

This coverage is intended to cover things such as:

  • Burial costs
  • Ceremony costs
  • Final medical bills
  • Small debts

The goal of a final expense policy is to prepare for passing with dignity prevent your loved ones from dealing with the burden of financial stress a death can bring.

The average total cost of a funeral is around $9,000.

How it works:

Final expense policies are small, permanent policies with guaranteed level premiums and a level death benefit.

This means 3 things:

  1. Your premium payment will not rise in the future.
  2. Your death benefit will remain the same.
  3. The policy does not expire. It is permanent and will pay out at death (provided the payments have been kept current).

Unlike Guaranteed Issue or Graded Death Benefit policies, there is typically NOT a waiting period for benefits to take full effect with regular, level final expense policies. If you were to die a week after the policy going into force, the full benefit would be paid out.

Benefits range from a few thousand up to a maximum of $50,000 with most insurance carriers, a few go as high as $100,000. Most final expense policies have a maximum age of issue of 80 to 85. There are however a few companies that will go up as high as 89 years old.

What they check:

  • MIB (Medical Information Bureau) – A database service that records health information from previous life insurance applications.
  • Rx database (Pharmacy Report) – Prescription database telling what medications you have taken.
  • Limited health questions – Must answer “No” to a series of questions about your health history.

Is a good fit for:

  • People who may have some health issues but nothing major
  • People in need of a small coverage amount intended to cover expenses related to their passing

There are 4 different types of no exam life insurance policies

There are 4 different types of no exam policies. These policy types serve different needs while allowing for people of all levels of health to obtain life insurance coverage.

If you need higher levels of coverage and are in at least average health, a simplified issue term plan is likely your best bet.

If you are preparing for your passing and want to cover associated costs, go with a final expense plan.

If you have some fairly serious health issues, look at graded death benefit first. If you can’t qualify for a graded, then guaranteed issue is available.

Questions? We are happy to help. Life insurance is our specialty and passion. Any conversation with us is always done with no obligation or pressure. There is no fee to use our service.

About Ty Stewart

Ty Stewart is the founder of SimpleLifeInsure. He is an independent life insurance agent that works for his clients nationwide to secure affordable coverage while making the process simple. There is never any cost to use his services.

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