No Physical Exam Whole Life Insurance - Is It Really A Good Deal?
Although there are insurance companies out there that will issue a no exam whole life insurance policy, there are exclusions written into most of these policies that you, the consumer, need to be aware of.
I'm certain that you've seen the television commercials that guarantee whole life insurance coverage for individuals from fifty to eighty years old, guaranteed, no physical exam whole life insurance, also known as no test life insurance policies. It seems as if they show them ten times during an evening of watching tv.
Anyway, here are some of the things that you should be aware of before you buy one of these policies.
Many of these policies are known as "Modified Whole Life Insurance". They are modified so that you must meet a specific set of terms in order to qualify for a full payment being issued at the time of your death. Some of the modifications to these policies are as follows:
#1. Your loved ones will be paid a reduced benefit, or nothing at all, in the event that you pass away within the first two years of the policy being issued. Some of these "modified" whole life insurance policies don't require an exam because they either pay a reduced benefit or nothing at all if you happen to die of natural causes within a specified time frame.
#2. Most of these policies will cover you in full for accidental death from the day that the policy is issued. This means that although you won't be covered in the event of a natural death such as heart attack, stroke, ect. you would be 100% covered in the event of an accident such as a car wreck, fall, ect. I'm certain that, as with most insurance policies, that there would be exclusions in your policy for recreational activities such as sky diving, scuba diving, race car driving, ect.
#3. This type of insurance is normally quite expensive. No physical exam whole life insurance coverage doesn't mean that it's going to be cheap, especially for most men.
Most insurance like this is sold in "blocks" of smaller amounts. Example, you may be able to purchase "blocks" of $3,000.00 each. The average block will cost in the range of $20.00-$30.00 per month depending on your gender, male or female. Men will pay more.
Now this really isn't that unreasonable, however the average funeral expenses will cost between $6,000-$10,000.00 these days. This means that realistically you'd need to purchase at least three blocks ($9,000.00) in order to make certain that you were covered and didn't leave your family with unexpected expenses. This can become extremely expensive if there are two people to be covered such as a husband and spouse. This is not affordable for many people that are retired or are approaching retirement.
The bottom line is this. Always get a second opinion on life insurance coverage before you buy, especially if it sounds too good to be true such as a no physical exam whole life insurance policy.
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