How Does Life Insurance Without a Physical Exam Work?

There are various types of no physical life insurance products. Each type has a different application process and costs. By choosing carefully, you can make sure that you don't overpay.
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how no physical life insurance works

Written by Brian Greenberg

Last updated: July 19th, 2022

Reviewed by Grant Desselle

As the name implies, no physical is necessary to get approved for this type of life insurance policy.

No physical does not mean there are no health questions!

Like most other companies, insurance companies are in business to make a profit. The physical is the most expensive part of the underwriting process, so insurers are eager to find a way to evaluate their risk without the time and expense of conducting a physical examination for every person who applies.

So how does life insurance work when there is no physical?

Before we get into the actual application process, it’s important to understand the different types of underwriting processes used for no physical life insurance policies.

Depending on the underwriting process, the price of a policy can double, or even triple, in cost.

The goal is to get the best deal on life insurance, right? To that end, you want to apply for the cheapest policy you can qualify for.

3 Main Types of Underwriting for No Physical Life Insurance

No physical life insurance is a broad term. For our purposes, it helps to know a little about the underwriting processes for the various products. For example, instant underwriting products have just an online application. With other types of products,  you may need to provide more information and possibly take a medical exam.

The more complex the underwriting process is, the more the policy will cost.

The table below illustrates the different process flows for accelerated, simplified, and instant underwriting products.

AcceleratedSimplifiedInstant
ApplicationApplicationApplication
First DecisionFirst DecisionDecision
Exam LikelyPossible
Phone Interview
Possible
Phone Interview
Possible
Medical Records
Request
Possible
Medical Records
Request
Possible Exam
DecisionDecision

1. Accelerated Underwriting

accelerated underwriting document

These products are the same as those that normally require a physical.

This means there is a 0% price difference when compared with policies that require a physical.

When an insurance company sees no need to invest in a physical for an applicant with simple health and financial history, the company may opt for accelerated underwriting. In this case, the information from the application, combined with the applicant’s medical records and financial reports, is enough for the company to make an underwriting decision.

To be eligible for accelerated underwriting you have to meet the age requirement, and there are limits to the amount of insurance you can apply for.  Eligibility requirements vary by company, so before you apply, verify that you meet the insurer’s specific requirements.

To be approved through the accelerated underwriting process, you must have no history of cancer, heart attack, stroke, or immune disease.

After you submit your application, the insurance company uses algorithms to provide instant feedback on whether you:

  • Are approved at the quoted rate
  • Are approved at a different cost
  • Are declined
  • Need to take a physical to continue the application process

Pros

Lowest cost

Accelerated underwriting policies are exactly the same as those that normally require a physical. They have the same application and underwriting requirements to determine your health class, which is what determines the cost of the policy. The insurance company simply decides the exam is not required, and you get the same rate as if you had taken an exam.

Highest coverage

Accelerated underwriting policies provide the largest coverage amounts available without a physical. Several insurance companies offer policy death benefits of up to $2 million, depending on the applicant’s age. The application is extensive, and your public reports and medical history must be relatively clear.

May be possible to skip the medical physical

You either qualify for accelerated underwriting or you don’t. It’s up to the algorithm and the underwriter as to whether a physical exam is required. Depending on the company, anywhere from 7% to 40% of applicants are able to skip the medical exam. Physical exams are time-consuming, invasive, and stressful. Bypassing the medical examination and getting the same pricing is the best possible outcome when purchasing life insurance.

Cons

Age restrictions

Eligibility maxes out at about 60 years of age. The closer you are to 60, the greater the chance you’ll be required to take a physical exam. Issuing a life insurance policy without having the applicant take a physical exam is risky for the insurance company. The risk increases when the premium prices are low and the coverage amounts are high.

Odds are you will need to take the physical exam

The percentage of applicants who qualify for accelerated underwriting ranges from 7% to 40%. For a policy to be approved, no additional information must be required. This means you need to have a simple, well-documented health history (i.e., you’ve seen only a limited number of doctors and you take no more than a few daily prescription medications).

Long applications

Be prepared for a 45- to a 90-minute application. These are the same applications used for people who apply for $5 million or more in coverage. Although the applications are taken over the phone, you’ll be surprised at how detailed the questions are. Overall, it is worth the lower cost of the policy.

The most popular accelerated underwriting life insurance companies are Banner Life Insurance Company, Lincoln Financial Life Insurance, and Pacific Life Insurance Company. It’s best to apply with one of these companies by going through an insurance agency.

Who is accelerated underwriting for?

  • Those with a well-documented health history
  • Those with no history of cancer, stroke, heart disease, or immune disease
  • Those who are in good health, with any medical conditions well controlled

2. Simplified Underwriting

simplified underwriting line

These products are different from accelerated underwriting since they are designed specifically not to require a paramedical exam.

After you complete the application, the insurance company uses algorithms to provide instant feedback on whether:

  • You are approved at the quoted rate
  • You are approved at a different cost
  • You are declined
  • More information is needed

If more information is needed, the underwriter may ask for a phone interview and medical records from your doctor. If the underwriter can’t get the necessary records, the company may give you the option of taking a physical exam instead of declining your application. It depends on the company.

Simplified issue products have lower coverage amounts and higher premiums than accelerated underwriting products.

The price may be just 1% – 5% higher than for traditional policies, though some products can cost up to 150% more.

Because of the huge price differences among simplified issue life insurance products, it’s important to compare companies to find the best policy.

Pros

Short application

Simplified issue life insurance policies are designed to be easier to apply for than policies that require a physical exam. The applications rely more on public reports and include less specific medical questionnaires. This means that the applications are only a few pages and take about 10 to 30 minutes to complete.

Pricing is often competitive

Insurance companies are investing in simplified issue products because their costs are lower for these products — they don’t need as many underwriters and medical examiners. Because there’s considerable competition among insurers in this market, no physical exam products are often available at lower prices than those that require a medical exam. Compared with the cheapest accelerated issue products, simplified issue products cost, in most cases, just a few dollars more.

No physical exam

Physical exams are time-consuming, invasive, and stressful. Scheduling an exam and then waiting on lab results extends the underwriting time to 4 – 8 weeks. The most attractive aspects of simplified issue products are that there’s no medical exam and the underwriting period is negligible (often instant and almost always less than 3 weeks).

Cons

Pricing can be high

The cost of simplified issue products varies, so you need to be careful when choosing a company. Products with fewer health questions on the application have higher costs. While some insurance companies have competitive pricing, others charge up to 150% more for simplified issue products. The trick is to find the cheapest product you qualify for. On the flip side, if you have health problems, then you may be fine with answering fewer questions and paying a higher price — especially if you cannot qualify elsewhere.

Coverage amounts are low

The maximum coverage amounts are significantly lower for simplified underwriting products. This is because relying on a shorter application raises the insurance company’s risk. It’s not unusual for simplified underwriting products to end up being unprofitable because of adverse selection, meaning too many unhealthy people get approved. The good news is that the maximum coverage amounts are increasing as companies optimize their algorithms.

One way around the low coverage amounts is to purchase multiple simplified underwriting products from different companies. The practice of buying multiple policies to achieve a desired total coverage amount is referred to as “laddering.”

Easy to get declined

Simplified underwriting products are risky for insurance companies. To prevent adverse selection, the insurance company may automatically decline the application if there’s some doubt about an applicant’s health. Diabetes is a good example. Although the severity of the disease varies from one person to the next, if you indicate on the application that you have diabetes, many companies will automatically decline you.

Insurist Insurance Agency is a good choice for simplified underwriting products. They represent a wide variety of insurance companies and it’s free to use their service.

Who is simplified underwriting for?

  • Those in good health, with any medical conditions well controlled
  • Those with no history of cancer, stroke, heart disease, or immune disease within the past 5 years
  • Those wanting low amounts of coverage

3. Instant Decision/Rapid/Express Underwriting

kid speeding in toy car

Online instant life insurance does not require a paramedical exam, phone interview, or medical records, ever. Algorithms are used to provide an immediate decision.

The algorithms check your public records, including your medication prescription and credit histories. Instant approval products are often referred to as either “rapid” or “express.” You can apply without talking to an agent, though you have the option to speak with an agent at any time.

The cost is surprisingly competitive. The price difference can be just 3% to 10% higher than for traditional policies.

Some instant decision products can cost up to 150% more than traditional policies, so it is important to choose the best company.

Pros

Fast!

Instant issue life insurance means you get approved or declined the moment you complete the application. The application takes less than 15 minutes to complete. ACH bank drafts are the preferred payment method, though some companies accept credit cards. After you’ve completed the application, there are no phone interviews or medical records requests. Instant decisions are great — unless you get declined.

Often competitively priced

It’s surprising how inexpensive some instant underwriting products have become. In fact, it’s not unusual for instant issue products to be among the top 10% of the cheapest products available. The reason for the cheap prices is that many instant life products are backed by investment capital firms that focus on growth rather than profits.

No agent needed

It is unusual for a life insurance policy to be sold without an agent being involved. Agents act as the front-line underwriter to verify that the applicant is a real person. They vouch for applications and are responsible for mistakes on the application. For these reasons, agents are required to have active insurance licenses and Errors & Omissions insurance. With instant underwriting products, there are no agents in the actual sales process. Applications are online, and you can complete one by yourself at any time of the day or night. Of course, this poses an increased risk to the insurance companies, but they balance this risk by not having to pay commissions to agents.

No physical exam

It almost goes without saying: Instant issue products are not only fast and easy to apply for, but they also have the benefit of not requiring a physical exam. If you’re looking for a no medical exam life insurance policy, an instant issue policy is the fastest way to get coverage.

Cons

Prices can be high

While some instant underwriting products are competitively priced, others cost up to 150% more than policies that involve the traditional underwriting process. Be sure to compare pricing, because some companies advertise the speed and ease of getting a policy and leave out the fact that prices are high. If a product seems to good to be true, check the fine print. Amazing products do exist, but so do those that take advantage of people.

Easy to get declined

Instant underwriting products are extremely risky for insurance companies. They bypass some of the fail-safes built into traditional policies — mainly, the agent and the physical exam. Underwriting decisions are based entirely on the application and public reports. There is no room for interpretation. As a result, if anything on the application or in the public reports is amiss, the insurance company’s usual reaction is to issue a decline.

Be aware that it’s not good to get declined for life insurance. A decline becomes part of your permanent record with the Medical Insurance Bureau. You will need to disclose it on all future applications, and sometimes a decline will disqualify you from being eligible for other life insurance products.

No room for interpretation

Life insurance is not an exact science. This is why it is so difficult for insurance companies to develop algorithms that can accurately determine a person’s life expectancy. Because the instant issue underwriting process is based 100% on algorithms, errors can’t be resolved. If there’s a mistake in any of your public reports, you have no recourse. Once the algorithm makes a decision, you are done.

Few riders and features

Instant decision products are marketed for their speed. To keep costs low, fewer add-ons are offered. Conversion options and living benefits riders are rarely available. Just be aware that instant underwriting products are often stripped of features to save costs.

While most companies that offer these policies have unfamiliar names, you can rest assured that they are backed by A-rated insurance companies. If you are younger than 50, the best options are Bestow and Haven Life. If you are 50 or older, run a quote to see your best options.

Who is instant underwriting for?

  • Those in good health, with medical conditions well controlled
  • Those with no history of cancer, stroke, heart disease, or immune disease
  • Those with no history of diabetes
  • Those with a simple health history

Insurist Recommendation

The most important thing is to get a life insurance policy. Don’t let an increase in cost because of a health condition cause you to turn down a policy. Life insurance is inexpensive when compared with the coverage you get. If the inconvenience of the application process is causing you to delay or avoid purchasing life insurance, know that instant decision products are a great way to get covered.

The competition in the life insurance industry is fierce. As a result, the costs of instant underwriting products are lower than they have ever been.
  • Start by running a simple quote. Many of the companies we quote offer instant underwriting products.
  • If you need help deciding what policy is best for you and don't want to do the research on your own, an independent agency can help. Policygenius has licensed agents in all 50 states and represents multiple companies.

  • If you prefer a more hands-on approach, we at Insurist specialize in high-risk life policies with premiums over $2,500 annually. We represent both the large and niche insurance companies and contact underwriters directly to find you the best deal. Contact an Insurist independent life insurance agent.

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