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 Posted: Tue Mar 02, 2010 9:46 am Post subject: Life insurance - No exam policies |
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Some times I do come across "No Exam life insurance" over the internet. Are such policies more expensive than the usual kind? Also, please explain what type of health related question they might ask us.
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Midlifeplanner
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| Posted: Tue Mar 02, 2010 11:58 pm Post subject: |
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Yes, they are usually much more expensive and are limited to much lower coverage amounts. As an example for a 40 year old male with $250k coverage for 30 years:
Best risk class (Preferred Plus), non-smoker - $350/year
No-exam non-smoker - $805-1,290/year
Pretty big difference. Why do you ask?
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dgoldenz
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| Posted: Wed Mar 03, 2010 7:14 am Post subject: |
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I had to answer so many questions while signing up with my insurer. Now, I just started wondering if I'd done the right thing. But yes, I don't think a non-smoker should need to pay that high an amount towards premiums.
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Midlifeplanner
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| Posted: Thu Mar 04, 2010 12:02 pm Post subject: |
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| Quote: | | Yes, they are usually much more expensive and are limited to much lower coverage amounts. |
That's perfectly true!
Most of these "No exam policies" are term life policies. The policy holder has to die within the term mentioned in the policy papers so that the beneficiaries get the death benefit. If the policyholder lives beyond this term, then the benefit wouldn't be offered. |
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steven
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| Posted: Thu Mar 04, 2010 4:37 pm Post subject: |
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| Quote: | | I had to answer so many questions while signing up with my insurer. Now, I just started wondering if I'd done the right thing. But yes, I don't think a non-smoker should need to pay that high an amount towards premiums. |
Yes, you are taking the right approach here. Insurance companies can offer lower rates by underwriting your medical history. The less questions they ask, the more money they charge.
Think about it this way - you could get 3 times the amount of coverage for the same price if you're in good health, just for answering a few more questions.
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dgoldenz
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| Posted: Fri Mar 05, 2010 6:22 am Post subject: |
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There are other disadvantages with these TL policies as well. If the policyholder dies within the first couple of years since the commencement of the coverage, then the beneficiaries might receive a lower benefit. Likewise, if the policy holder passes away due to natural reasons (within a specified time frame), then also the benefits may be lowered.
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sil
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