Life Insurance No Exam Policies Provide Instant Coverage

In the legal parlance, a life insurance policy is defined as the equitable transfer of risk (of a loss) from one entity to another, in exchange for a payment. In other words, it is a form of risk management bought to cover certain risk such as the death of the insured or some critical illness. Under this scheme, certain amount known as the premium is paid to the insurer at regular interval and in return, the insurer promises to pay certain amount known as benefit on the occurrence of the insured event. 

However, under certain circumstances, such policies when provide investment opportunity to the policyholder they are known as life assurance policies. A true life insurance policy does not provide anything other than death benefit and if the death does not take place while the policy is still valid, no return can be claimed. However, in case of the assurance policies return in some form or the other is always assured because of the cash value accrued. That may be the reason why such policies are called assurance policies instead of life insurance.

However, all these differences are rather too technical. We usually treat all types of policies only as life insurance policies. The experts have divided these policies under two distinct categories:

1. Temporary Term Life Policies – These are pure life insurance policies, which provide a handsome return at a very reasonable cost. If you get life insurance quote for different types of policies, you will know that they are the cheapest of all. However, these policies are valid for a fixed term and do not provide any return unless the insured dies within that term.

2. Permanent Life Insurance Policies – These policies are valid for the life of the insured and so they provide benefits whenever the insured dies. Moreover, they accumulate a cash value by using part of the premium you pay. Consequently, they can be cashed out after stipulated years. However, because a part of the premium is used to grow the cash value, they are always overpriced.

In fact, these permanent policies are actually the life assurance policies that have been mentioned earlier. You can choose from various categories of these policies depending upon the mode of investment and amount of return. Among all, the whole life, the universal life and the variable universal life policies are the most popular, at least here in the United States. 

Most of these policies, term or whole, have long underwriting process because the coverage is always provided after thorough investigation of your insurability. However, certain special categories of policies provide instant life insurance coverage too. Such policies do not require you to undergo any medical test or submit any insurability certificate. Here too you find two different categories of policies; one requires you to qualify while the other promises guaranteed coverage.

The life insurance no exam policies are usually term life policy sold for a specific term. Just as any other term life insurance policies, they do not accrue any cash value and so you get no return out of it unless the insured event takes place. However, they are more expensive than traditional fully underwritten term life policies simply because the insurability risk is greater for the carriers. Although they use various methods to check it, the actual condition of your health cannot really be ascertained without the medical test.

Remember, a life insurance no exam policy, exempts you from taking any medical test, but it does not really guarantee you any coverage. For instance, if you have been refused coverage within last two years, such a policy will refuse it too. The coverage is not only based on answer to some health related questions, but the underwriters also run you through Medical Information Bank and Motor Vehicle Records for confirmation of different inputs supplied by you. Police records too are checked for the same purpose.

However, if you are ready to pay even more, you can look for graded life insurance policies. These are whole life policies and the coverage is never refused under this plan. They cost a little more, but they do not even ask you those health related question. Whatever be your age or health condition, as long as you are not actually living in a hospital or similar health facilities, you are eligible for it. However, as the name suggests, the benefit under this policy is graded; which means if you die within two years of the policy purchase, your beneficiary will get back only the paid premium plus the interest; the actual benefit will be withheld. Therefore, be a little cautious about it.

Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on life insurance and no medical exam term life insurance, visit his site today.