Many life insurers require applicants to undergo a medical exam before offering coverage because health is a significant factor in life expectancy. However, some policyholders may prefer to skip the medical exam since it can slow down the process of getting coverage.

Fortunately, several life insurance policies can be obtained without a medical exam. This article will explain how life insurance with no medical exam works, then dive into several no-exam policies to consider and evaluate how they compare to other policies.

How does life insurance with no medical exam work?

Life insurance with no medical exam lets the applicant skip the medical exam entirely. Instead, the insurer may ask the applicant questions about their habits, occupation, and similar information to underwrite the policy. This makes it easier for older applicants or those who don't want to deal with a medical exam to get life insurance coverage.

Types of no-exam life insurance policies

All no-exam policies let policyholders skip the medical exam. However, each has its nuances that are worth considering when evaluating which policy to get:

Simplified issue life insurance

Simplified issue life insurance is a small permanent life insurance policy that asks fewer questions during the application process and doesn't require a medical exam. Since it's a permanent life policy, it lasts for a lifetime and comes with a cash value growth component. Part of each policyholder premium goes into this component, which grows tax-deferred at a fixed interest rate.

When the cash value grows large enough, policyholders can withdraw from it or borrow against it at favorable rates and terms. The policyholder receives the cash value minus surrender charges if they surrender the policy.

Simplified issue life insurance death benefits are much lower than traditional permanent life insurance policies. However, premiums are also cheaper.

Guaranteed issue life insurance

Guaranteed issue life insurance is a small permanent life insurance policy that virtually guarantees that the policyholder will be approved. Compared to more traditional life insurance policies, there are no questions and nearly no restrictions.

But keep in mind that guaranteed issue life insurance may come with a 1- to 2-year lockout period. If the policyholder passes away during this period, their beneficiaries may only receive a refund of the policyholder's premiums. They won't get the full death benefit.

Guaranteed issue life insurance death benefits can be smaller than simplified issue life insurance, but premiums can also be less expensive. Guaranteed issue life insurance also comes with a cash value component.

Final expense insurance

Final expense insurance is a small permanent life insurance policy for end-of-life expenses like medical bills and funeral costs. It offers affordable premiums and cash value but also has a smaller death benefit than traditional permanent life policies. 

Unlike the other types of no-exam life insurance policies, final expense insurance may not come with a lockout period. Overall, this policy can be helpful for older policyholders wanting to assist their families with end-of-life costs.

The bottom line

Older policyholders and people who simply don't want to take the medical exam can get no-exam life insurance. They may not get as much coverage as traditional life insurance policies, but the application process is faster, premiums are cheaper, and policies come with lifelong coverage and a cash value growth component. No matter which policy type is best for their needs, applicants should shop with multiple insurers to compare rates and get the most coverage for their budgets.