There are big differences between a term life insurance policy that does not require a medical examination and a guaranteed acceptance whole life insurance policy that guarantees eligibility based upon a few medical questions. Although there may be no physical or paramedic examination required in order to secure coverage with particular term life policy there will still be an underwriting process that needs to take place after applying for coverage with most carriers.
Although many assume that these policies that do not require a paramedic examination are purchased as in the same way that you would purchase an off the shelf product from a retail store, it is important to understand that insurance carriers will a series of double checks referred to as the underwriting process prior to issuing a policy.
For these term life insurance cases these review include:
- Driving Record Verification – With the majority of insurance companies the application process includes a consent to check and review driving record activity. Depending on the company selected there will be requirements in place to ensure eligibility. Most commonly these would be no driving under the influence of alcohol or drugs within the last 7 years, no other major violations within the last 5 years, no more than 2 standard moving violations, and no driver’s license suspensions within the last 5 years.
- Prescription History Check – When applying for a policy the insurance carriers will review the prescription history of the applicant to ensure that there are no prescriptions that had been prescribed to the applicant that are typically reserved to those of whom have medical conditions that would make the applicant be ineligible for coverage.
- M.I.B. Check – M.I.B. check is a reference of the medical information bureau that reviews the history of the applicant to review for any other outstanding or recently applied for coverage.
- Although some consumers may see this additional review to be intrusive and counterproductive, it is imperative that the insurance carriers do their part to protect the rates of those whom qualify for coverage and ensure that the appropriate clients receive coverage from these policies.
It is important to remember that most carriers structure these policies to offer rate based upon a simplified issue concept and create rates structured to appeal to those whom prefer to purchase a simplified issue policy with a limited underwriting process, as opposed to, those with significant pre-existing conditions that a guaranteed acceptance policy would be best suited.