No Medical Exam Life Insurance A Rip Off?
Don't pay too much by purchasing a guaranteed issue life insurance policy. These final expense insurance policies have their place, but too many people who could qualify that are both cheaper and better overpay for guaranteed issue life insurance contracts.
Guaranteed issue or simplified issue insurance policies are advisable for only a few of us If you have a significant health challenge, you may not qualify for any other type of plan. Your health history might keep you from getting a standard life policy.
However, this is not the case for most people. This is not even the case for most older Americans. Even if you have some health issues, you are likely to qualify for a standard plan.
If you take prescriptions for hypertension or bone density issues, you may believe that you won't be approved for standard life coverage. This is probably not true.
You could have a higher premium than someone who is free of any medical issues, but you will probably not pay nearly as much as you would if you applied for a guaranteed issue life insurance plan.
Guaranteed issue or simplified issue whole life policies can cost you much, much more when compared to other contracts. There are other issues. You will probably get a slower equity or cash value build up. Your loved one will not receive the full death benefit if you die in the first two or three years after buying the policy.
Even if you don't plan to use the cash value it can be used to keep your policy in force during hard times. Many policies will allow you to spend a portion of your cash value to keep the contract going when you are can't pay from your checking account.
Your loved one may not get what you expect them to get if you purchase a guaranteed issue whole life insurance plan. Many of these contracts are modified benefit plans. This typically means that if you die within two or three years after your contract's effective date only a fraction of the face amount is payable. Your loved one could only receive a small fraction of the face amount.
Avoid being one of the many people who will grossly overpay for their whole life plan. Taking a physical or answering a few health questions can help you to pay much less. Even if your application is rejected, you can buy a guaranteed issue policy later so you have nothing to lose by trying to get a less costly plan first.