Full Medical vs. Non-Medical Life Insurance

What does it take to get life coverage these days? That depends on what type of coverage you are trying to get. There are different kinds of coverage out there, but for the most part term is the common flavor. Term, while not for everyone, is the normally the lowest priced coverage out there enabling folks to get the most amount of coverage. I have term coverage on my own life with the option to convert to permanent if I want to down the road. This means I will not be shut out if I need coverage when my policy expires. Once you have realized that term coverage is the way to go, there is often the choice of a Non-Medical vs. Medical application process. If you are going for a full medical life insurance here is what you can expect as you go through the process:

  1. An application where you get asked about you health and health history.
  2. A medical exam, either at your house or you go to their office and give a little blood, urine, and get your vitals checked.
  3. The insurance carrier checks your MIB status (Medical Info Bureau) to see if you may have been diagnosed/treated for anything, and also your driving record, and pharmacy report.
  4. The insurance carrier MAY order your medical records depending on what they find.
  5. The carrier offers you a final offer or rejects your application.

Sometime this process can take as long as several months! I am finishing a plan now for a client that has been pending for six months! Normally however it is about six weeks and the upside is that you can oftentimes find the most competitive offers with a full medical life insurance plan. You also can get the most amount of coverage. I have issued plans as high as 2-3M off a full medical life insurance offer and got stellar rates from competitive carriers. Now if you would prefer a non-med plan the process can go considerably faster, usually just 2-3 weeks, but your coverage limit is usually capped around $250,000. They also normally don’t ask for medical records or order a medical exam requiring blood, urine, vitals, but your premium is a bit higher if you are in good health. The basic principal is if you are willing to bear all to the insurance carrier you will pay less than if you are in good health.
So which is the better option? I like full-medical life insurance, but if you have a potential health condition looming or know you have a diagnosis, a non-med product could be the best way to go. Rarely have I had folks fully declined, but when I do I wished I had offered non-medical coverage first. One of my existing clients was just declined on a full medical life application based off some of her medical history, but since she had picked up a non-medical plan prior with me she still had that intact. Had we applied for full medical coverage first, been declined, and then applied non-med, it could have been much more difficult to get any coverage at all. Nearly every life application asks if an applicant has ever been declined insurance, and while this does not mean you can’t get approved, it certainly does not help to have to answer “yes”. While non-medical coverage is not automatic approval, it is much easier to get. So the key with all life coverage options is to be pro-active, shop the markets, and get covered before a medical problem or an age makes it prohibitive!

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