Applying for life insurance is not most people's idea of a good time, especially when it comes to the required medical exam. Thanks to new advances in the insurance industry, you may be able to get insurance without having to be probed or prodded at all.
Says Kirby Thomas, Customer Service Lead at LifeInsuranceToday.US, "The required life insurance medical exam of the past is going away. Multiple carriers offer insurance without an exam. Looking at it year by year, the changes are coming fast, and each carrier is looking to the left and right to see where to move next without taking on too much risk as a pioneer of tech-driven processes paired with life insurance."
Historically, the life insurance medical exam has been an important part of assessing risk – and it still is for people with various medical conditions and risk factors – but, in today's world, insurance companies have access to massive amounts of publicly available data that can help them calculate life expectancy with limited additional information. Examples of relevant data include your prescription drug history and motor vehicle records. Predictive algorithms on life expectancy have advanced to the point that, for many applicants, insurance companies can correctly measure risk and underwrite policies without the need for a qualifying medical exam.
This risk assessment process, known as accelerated underwriting, allows online insurance providers to respond rapidly to applicants. You begin by providing information regarding your health and relevant areas of your family's medical history, and the insurer secures your permission to access other available data. The insurer pulls this supplemental data from readily available sources and feeds this data into the predictive algorithms to calculate your offer, if any.
You may have concerns about the insurance company's ability to access your records, or find the lack of pricing transparency troubling. Insurance regulators are considering how to deal with the side effects of accelerated underwriting, and regulations may adjust in the future to accommodate the changes – but, if the concept troubles you, you still have the option of dealing with an agent directly.
Why would insurance companies want to do away with medical exams for any potential client? Two reasons – to save money and make the process easier and more convenient for both the insurer and the insured.
If an insurance company can make an accurate data-based risk prediction without having to pay for a medical exam, that's direct savings to the insurer. Meanwhile, insurance industry research has found that the longer it takes to process an application, the less likely applicants are to buy insurance – and it can take two weeks or more to get an insurance medical exam completed and assessed.
Says Thomas, who specializes in online insurance sales, "Personally, I like the idea of skipping the exam. Currently, the limits are the face amount, as higher amounts will not qualify for the no-exam approach, and some carriers don't yet offer digital signature capability."
You can still purchase insurance online even if a medical exam is required in your case. The insurance company will assess risk based on what they know and either activate the policy once the exam results are in, or activate the policy immediately and adjust the price if warranted by the exam results.
By purchasing insurance online, you give up the personal face-to-face service of an insurance agent for the convenience and speed of an online application – with a good chance of lower cost as a further benefit. Online processes allow you to easily comparison shop and find the best policy for your life insurance needs.
Thomas predicts that, "Within a decade, I believe that automated underwriting, no exam approvals, digital signatures, plus some other things will be more prevalent, and will be a reality on larger policies, as well." In the meantime, if you are in the market for a life insurance policy, why not see if you qualify for an online policy that requires no medical exam? Of course, we are assuming that a life insurance medical exam is not your idea of a good time.
You can get free life insurance quotes and apply for your top choice in minutes using our Life Insurance Quote Comparison Tool. If an exam is required, you can schedule it online.