by Insurance Maze » Sat Mar 01, 2008 05:38 pm
Someone placed an article on this subject in the "Advertise" section of the forum, but I think this subject is much more important.
How can an insurance company issue a $250,000 life insurance policy on your life if they know exactly nothing about the current condition of your health? What exactly are the terms and conditions of these life insurance policies?
Sure they may check the Medical Information Bureau (MIB), but what if you were diagnosed with cancer yesterday?
Don't you think that these web sites that advertise "No life insurance-medical exam" are attracting people with health problems who are trying to put one over on the insurance company?
A traditional life insurance exam is not really an exam at all. A para-med asks you a lot of health questions, obtains a mouth swab, and possibly a urine specimen, that's it. I really don't see the big deal.
Just how secure are these "No Medical" life insurance policies?
Are they actually underwritten at the death of the insured?
How can an insurance company issue a $250,000 life insurance policy on your life if they know exactly nothing about the current condition of your health? What exactly are the terms and conditions of these life insurance policies?
Sure they may check the Medical Information Bureau (MIB), but what if you were diagnosed with cancer yesterday?
Don't you think that these web sites that advertise "No life insurance-medical exam" are attracting people with health problems who are trying to put one over on the insurance company?
A traditional life insurance exam is not really an exam at all. A para-med asks you a lot of health questions, obtains a mouth swab, and possibly a urine specimen, that's it. I really don't see the big deal.
Just how secure are these "No Medical" life insurance policies?
Are they actually underwritten at the death of the insured?
Posted: Mon Mar 03, 2008 07:00 am Post Subject:
Just how secure are these "No Medical" life insurance policies?
Are they actually underwritten at the death of the insured?
Care to divulge which way your are pointing! :) I seriously don't think that a life insurance policy can be written without proper medical investigation. The medical condition of the applicant is an important underwriting issue and can't be overlooked.
Posted: Mon Mar 03, 2008 07:05 am Post Subject:
I know of an insurer who denied my uncle a coverage because he was diagnosed with high blood sugar at the time of medical check-up while applying for a life plan. I'm really interested to know more about the plans that require No life insurance medical exam. Hope to see some good responses here.
Posted: Mon Mar 03, 2008 07:11 am Post Subject:
How can an insurance company issue a $250,000 life insurance policy on your life if they know exactly nothing about the current condition of your health? What exactly are the terms and conditions of these life insurance policies?
It really doesn't sound right to me.
Posted: Mon Mar 03, 2008 01:49 pm Post Subject:
Is it just a gimmick? or there is some truth behind the claim?
Is the applicant required to pay more as premium to get an insurance without medical check?
How they determine the premium and also the coverage level?
If some insurers can write policies without medical report then why the other require it?
These are very good questions.
I have not gone through the "application process" on these web sites that advertise "Life Insurance-No Medical Exam" for the simple reason I did not want to buy the insurance, but I have looked at one of these life insurance policies.
The policy I examined was advertised as a "20 Year Term", but after reading the "Terms and Conditions" of the policy, I discovered that the policy would actually renew every "5 years", with an increase in premium every 5 years. The premium increase is significant.
I certainly don't know whether or not all of these policies that do not require any life insurance medical exam work this way, but you can rest assured, there are "limits" somewhere in the actual policy.
Once again, a life insurance exam is no big deal and I, personally, had rather be safe and buy my life insurance from a professional insurance agent.
Maze
Posted: Mon Mar 03, 2008 03:11 pm Post Subject:
Life insurance with no medical exam policies are more and more prevalent on the internet with each month passing it seems.
I believe the reason for this is several factors converging:
1. Increased competition.
2. Efficiency of technology making it possibly.
3. Centralized medical information bureau availability.
4. Increased Longevity of consumers.
5. Better returns on life insurer investment portfolios - This is until AIG took a 5.3 Billion Loss in the last quarter, and now more insurers will be taking losses as a result of Credit Default Swaps, or so it seems.
It seems the insurers are more interested in giving the consumer what they think they want - That is faster, easier life insurance products.
You know the tide is turning if Prudential has even gotten into the game of no life insurance medical exam plans. No, this is not a scam, but a way of the future, at least for now, until they discover this may not be prudent from an ROI point-of-view. Or, until we see negative results on the end of the consumers buying the policies.
Yes, some policies offer 5 year increases in rates. Other may be level term life insurance plans offering level rates for longer periods of time.
As always recommended - it is important to understand how the policy works, what changes will take place in the premiums charged at the end of the policy term, are there conversion privileges, can you renew the policy without evidence of insurability, and what is the financial rating of the firm, not to mention how good is the customer service?
The point being, this type of policy may be good for some who accept the fact that the rates may be higher than for fully underwritten policies, but they want the quicker and easier route in starting a policy today, if they qualify.
That being said, if you don't understand the critical factors involved in a term life insurance policy, you may end up paying more in the long run.
Posted: Mon Mar 03, 2008 09:47 pm Post Subject:
Hello Maze,
Underwriting a $250,000 life insurance policyt without at least a para-med, blood, and spec is a joke - and we should all know that. God help the poor consumers who get sucked into this diabolical scam and get financially hurt by it. I feel sorry for them.
You know it must be some sort of renewable term plan with requalification due every year or so and/or the policy is underwritten on the back-end.
Really though, how could a company ever afford to issue large policies without complete underwriting? Maybe they'll hire the Tooth Fairy to head their compliance department.
Posted: Mon Mar 03, 2008 11:30 pm Post Subject:
This is in reply to InsInvestigator:
Please refer to this url to review the offer made on a policy that discourages life insurance medical exam as issued by Pruco Life Insurance Company.
http://www.agstar.com/uploads/MyTermFastFacts.pdf
It clearly states that the Level Premium Period is 10, 20, or 30 years, as selected by the policyowner.
I hope this makes clear it is not a scam. I do not believe Prudential would be involved in a scam.
Also, this is not annual renewable plan that requires requalification every year.
I sincerely believe that these types of policies will become more prevalent, and in time, will provide more competitive rates, and guaranteed level premiums for extended terms.
Having been a life insurance agent, and an underwriter, manager, s.v.p. and partner, I do completely understand the ethical questions which arise as a result of these types of policies.
Also, I do hold 8 professional insurance designations, and do understand both sides of this debate. Actually, I completely understand your position, most importantly being the concern for the consumer, and their well-being.
However, in time, these types of policies may become as common as getting term life insurance quotes online using a quoting service.
Maybe, this is just a sign of the times. A change in the way business will be done as relates to various types of term life insurance plans.
As you mention, there is room for abuse in this type of offer, if the consumer does not understand how the plan actually works, how premiums may change, when those premium increases may take place, as well as, the options for renewability and conversion - if they do exist with these policies.
Finally, in reference to the underwriting question, you bring up a very good point. What will the long-term impact be on losses, and change in ROI for life insurance companies offering these plans.
I would expect that the online application would become more extensive, the rates will be adjusted in time, based on loss experience (as always), and in time, the insurers will get it right - or lose money big time.
Posted: Tue Mar 04, 2008 02:26 am Post Subject:
No medical life insurance is definitely out there, is available from many very reputable carriers, cannot vary from state law in any sense as to protections given to the consumer, and normally contain certain subtle differences and a few not-so-subtle differences.
For instance, you can generally only get term coverage. Not many carriers are willing to issue perm coverage without medical, unless you are talking "Gerber Grow-Up" plans or something similar. Once in a while you'll see mailers from banks that are working in tandem with insurers to offer their depositors quasi-group coverage with no medical. Limits there are low...never seen anything with a face amount more than about $25,000.
Back to the term insurance. The usual kind of things you'll see are
* Lien Periods, which restrict payment of the death benefit in full until the policy has been in force for a certain period of time, commonly 2-3 years. Death during the "lien period" normally constitutes a pro-rata death benefit or a simple refund of premiums paid, maybe plus interest.
* No-medical doesn't mean NO MEDICAL. They do generally ask medical questions that are very limited in nature and only cover basic stuff. You will, of course, authorize MIB etc. so the insurer can check what they can check.
* The premiums can be horrendous (gee.....I wonder why???) I recently checked out a few and they wanted almost SEVEN TIMES the annual premium amount that I'm currently paying for my term coverage. So, simple underwriting equates to really high premiums!
On tbe other hand, I would definitely check out the carrier prior to any purchase, and I would absolutely stick with the proven horses. Don't go anywhere to purchase this stuff, because as many of you are pointing out, there could be problems. But when I see Prudential, PEMCO, Ohio, etc. offering the product.....
InsTeacher 8)
Posted: Tue Mar 04, 2008 03:31 am Post Subject: medical
Of course, if someone has a serious medical condition (ie.....Lupis, Diabetic) they can't join the military. I know someone who wanted to join the Army. he passed BasicTraining, with flying colors. Was excited to go to his 'permenent duty station.' He find out, when he arrived at his 'duty station', that he some kind of blood disorder. He NEVER knew he had this. The military gave him a 'Honerable Discharge.' The military couldn't 'keep' him.....the insurance (in the military) wouldn't cover him with a 'pre-existing' issue. Needless to say, he was disappointed.
Posted: Tue Mar 04, 2008 03:47 am Post Subject:
That brings up a good point.
No exam life insurance plans are usually only approved for people in good health. Pre-existing health problems would generally be a decline situation, in most instances.
Also, what if the health questions asked, and medical information bureau report show no health problems? But then it is discovered you had a health problem that would have created a decline situation on the application?
Add your comment