Medical examination and how it affects your life insurance

Information verified correct on April 24th, 2017

Everything you need to know about a life insurance medical examination

Life insurance policies can be divided into two types; the kind that requires a medical examination and the kind that doesn’t. In many cases it’s preferable to go ahead and take the medical tests, especially if you’re relatively young or healthy for your age.

This is because your life insurance premiums are linked to your statistical life expectancy, so when an insurer knows where you stand you may get lower premiums.

Meanwhile, even if you’re not in in great shape, there are still some other advantages to getting a medical exam for life insurance.

Compare policies with limited medical underwriting

Is there a benefit of taking a life insurance medical test?

Life insurance medical exams can take a few different forms. Sometimes it might be as simple as a questionnaire, or the insurer might ask your doctor to forward some medical information or previous test results with your consent. Other times an insurer will want one of their own doctors to conduct an examination.

If you’re in good shape then the tests can reveal as much, so you can get lower premiums to reflect this.

Can life insurance work out cheaper if you take a medical exam?

One of the main reasons is because you can be confirmed to be in reasonable health, which lets insurers offer lower premiums with more confidence. Insurers might decline cover, or only offer more limited cover, to someone with a lot of health issues which lets them keep premiums down for everyone.

In other words, these policies will generally offer higher premiums or more specially tailored cover to higher risk individuals, rather than simply setting higher premiums across the board for everyone.

Even if you’re overweight, have high blood pressure or are in other ways not in the best health, it can still be more cost-effective to get insurance with a medical test, thanks to the lower average premiums, and because many insurers will reward health goals with lower premiums.

Asteron Life, for example, has a rewards program that reduces premiums if you were overweight when you signed up, but then moved towards a healthier weight range. Similarly, AIA has the Vitality Program which is geared towards making health management easier, as well as delivering lower premiums for those who take part.

Are there any other reasons to take a life insurance medical exam?

In addition to lower premiums, one of the more important reasons to take out a life insurance policy with a medical test is because it can help you be more confident in your cover. Even with no-medical policies you are still required to inform the insurer of health issues such as pre-existing conditions, whether you’re a smoker and similar factors.

The medical test and questioning can help make sure everything appropriate has been disclosed to the insurer, and that, for example, you haven’t accidentally failed to mention a pre-existing condition which might lead to a claim being denied later.

It can also let you access more comprehensive policies, such as combined life insurance which include trauma cover, income protection or total permanent disability (TPD) insurance, which may not be available with non-medical policies.

No medical life insurance

Life insurance policies that are offered to an applicant without having to submit to a medical examination are becoming increasingly popular,

What is no-medical life insurance?

especially since people now prefer to seek out their own cover online. No medical life insurance is s quick and easy with no waiting involved - which often happens when at a doctor’s appointment and for the results to come back from pathology regarding your urine and blood tests. In contrast, no medical life insurance applications can be completed either over the internet, or by telephone within minutes.

What are the advantages of taking out cover without a medical exam?

Naturally, there are still some advantages to not taking a medical exam with your life insurance. The most obvious is that it’s quicker and easier, and you can get cover in minutes rather than in days or weeks, while the insurer waits for the results of a blood test or similar.

What are the drawbacks?

No medical life insurance usually comes at an increased cost. When insurance companies do accept a person without having to undergo a medical examination they then fall back on the law of averages, reasoning that in a certain number of people (policy holders) they can expect to lose a given figure. Where most insurance companies may be willing to accept younger applicants without requesting they undergo a medical examination it is unusual for any to allow older applicants the same privilege.

When would I need this type cover?

Many people accept the higher premium cost of no medical life insurance because of the speed in which such a cover can be implemented. Where it can take up to six weeks to obtain cover under a policy that requires a medical examination, a no medical life insurance policy can become a reality within days, if not immediately. This time difference can sometimes be a very important factor, especially if the insurance cover is needed to ensure the success of a large loan or mortgage being accepted. Many other no medical life insurance policies are issued to older people in the form of funeral policies, these are people who are preparing for their end and have no possibility of passing a medical examination even if they were allowed to do so.

Which life insurance policies will guarantee acceptance without a medical test

There are a handful of policy types and situations where you can get guaranteed acceptance for life insurance without taking medical tests.

  • Accidental death cover: This type of policy only pays out in the event of accidental death, such as in a car accident. It doesn’t have as comprehensive cover as normal life insurance, but can still provide relatively high sums insured.
  • Funeral insurance: With relatively low payouts, generally of around $15,000 to $30,000, these policies are designed to cover the cost of funerals and other immediate expenses rather than being full life insurance for beneficiaries.
  • Group life insurance: Group life insurance policies cover a lot of people under the same policy. For example, when an employer has life insurance policies for a number of employees. Depending on the insurer and the policy these will sometimes include guaranteed acceptance terms.
  • Guaranteed renewals. Some life insurance will allow you to continue cover once you have been accepted if your health changes, as long as you continue paying for your premiums,
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Group cover

It is noticeably harder for someone with health conditions to obtain life insurance without submitting to a medical life insurance examination. These applicants may be able to obtain life insurance with no medical examination if the insurance is arranged through their employer as group insurance. In this case the number of people in the group can give the insurer a pre-defined expectation of the risk they are undertaking.

What’s involved in a life insurance medical exam or questionnaire?

Some insurers will ask you to undergo a medical examination either at your own doctor or with a doctor of their choosing, before offering cover.

A medical exam is fairly routine, and generally involves checking:

  • Height and weight
  • Blood test
  • Urine test
  • Pulse
  • Blood pressure

These can give a reasonable overview of some common health issues and your risks. Depending on the situation an insurer might also want to conduct more in-depth examinations before offering cover.

For example, if you’ve had certain injuries in the past then an X-ray might be asked for, or if you’ve been identified as a high risk for certain illnesses then a screening might be called for if you haven’t had one recently.

The questionnaire included with life insurance applications will generally ask about:

  • Your doctor: The name, contact information, when you last had a consultation and what the outcome was.
  • Insurance details: Whether any other insurers have refused to cover you, or told you that they would apply loadings, restrictions or exclusions.
  • Previous insurance claims: Whether you’ve ever received benefits or made a claim for an illness, injury or condition.
  • Smoking status: Whether you’ve smoked or used nicotine products within the last 12 months, including electronic cigarettes
  • Drinking habits: Whether you drink alcohol, and how much.
  • Drug history: Whether you have used certain illegal or prescription drugs in the past, and ever been recommended for treatment for drug or alcohol abuse.
  • Height and weight: As well as weight change in the last 12 months
  • Medical history: Whether you have ever shown symptoms of, been told you had, or received professional advice for a range of specific health issues, such as diabetes, mental illnesses, asthma, cancer, skin conditions and others.
  • Family history: Whether any of your immediate family members have had specific health issues, known to have a genetic component, in the past.

Premiums and life expectancy

A medical test is designed by experts to determine if you have, or don't have, any medical condition you're not aware of that can affect your mortality and morbidity (essentially your life expectancy).

Life insurance companies base much of the cost of their premiums on a person’s life expectancy, the level determined by actuaries for various age groups. This results in younger people being able to purchase life insurance at a lower cost than older people. Your life insurance company also needs to ascertain an individual’s health level to allow them to either accept the person as a particular risk by imposing an additional cost or rejecting them outright. On occasions an insurer will request an applicant’s own doctor to forward certain details about the applicant’s health so they can achieve a better understanding of the risk they will be carrying, and the amount of premium they will need to levy against the applicant.

Other matters they will often take into consideration when assessing an applicant risk factor, along with their medical life insurance examination results, will be their occupation, education, parents’ ages, weight and smoking habits.

What about family history?

Not only are health matters and age determining factors in being able to acquire life insurance at an affordable price, your family history can also be taken into consideration. The likelihood of you contracting the same disease as one of your parents or siblings did is very real and can affect the amount of premium you will have to pay. It can also determine if you have to undergo a medical life insurance examination as well. This type of precaution has become very important in the event of inheritable illnesses such as cancer and heart disease.

Is obesity something that is disclosed?

As the populations in the developed world are becoming more obese and this condition has been linked to diseases such as diabetes and certain heart conditions, insurance companies are looking at obese people of all ages as a greater risk than those who are less so. They are now asking such people to pay higher premiums than their lighter colleagues regardless of whether they undertake a medical life insurance examination or not.

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