Underwriting is the process an insurance company uses to review applications and decide whether to approve them, and at what rate for the buyer. Some types of life insurance underwriting are faster because they use less information about the applicant or they collect information electronically from third-party sources.
Accelerated Underwriting Life Insurance
Accelerated underwriting is a process where the life insurance company gathers information about you electronically and algorithms help assess what your life insurance quote should be. Accelerated underwriting policies offer the convenience of no exam and can be priced as competitively as a policy that requires an exam.
The insurance companies in our analysis offer accelerated underwriting. A no-exam life insurance application doesn’t mean that the insurer knows nothing about your medical history. You’ll generally need to fill out a lengthy questionnaire with health questions, and the insurer will likely gather health-related information about you from third-party services.
The life insurance companies in our analysis are typically pulling your prescription drug history, motor vehicle report and information about you from the MIB Group, which collects data from your past applications for individual life and health insurance.
Simplified Issue Life Insurance
Simplified issue life insurance is a streamlined approach to underwriting. These applications typically ask some health and lifestyle questions and do not require medical exams. Your answers to the application questions could disqualify you from buying a policy. The life insurance company will generally supplement information about you with data from third-party sources. The cost of simplified issue policies tends to be higher than fully underwritten policies because the insurer has minimal information about you.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance policies offer coverage with no medical exam and no questions. You can’t be turned down. Guaranteed issue life insurance is intended mainly for those in poor health who want only a minimal amount of coverage—usually to cover funeral expenses or to leave a small inheritance to family members. These policies usually have low maximum coverage amounts and a graded death benefit, meaning they won’t pay out the full amount if you pass away in the first few years of owning the policy.
Guaranteed issue policies are generally the most expensive way to buy life insurance because the insurance company has no health information about you.
We did not include guaranteed issue life insurance in our analysis of the best no-exam life insurance.