What are the pros and cons between medical underwritten life insurances and non medical life insurances?
Comments (1-10)
In general, medically underwritten life insurance is less expensive than non-medically underwritten life insurance. With medically underwritten life insurance, each individual qualifies for a premium based on their health. With non-medically underwritten life insurance, you are essentially treated as part of a large group, and that group contains healthy people and not healthy people, so the premium is based on the health of the entire"group".
That's the short answer.
I agree with Kenneht Novak & Brian Wisda, howevere, in my humble opinion...it really depends on what the client's (individuals or business owners)goals are...
Non medical either has a cap on the face amount available, or there is an age limit. Also, premiums are higher. There are term policies that have no medical exam, but it is at the discretion of the underwriter who does the phone interview, or A guaranteed issue policy with absolutely no medical anything and face amount is no more than 25,000 typically.
Life insurance that does not have medical underwriting is more expensive since it is priced with the assumption that it is only attractive to unhealthy people. There is usually no coverage for illness in the first two years of payments other than a refund of premium with interest, although most policies offer coverage for accident in the first two years. Medically underwritten policies will ALWAYS be better if you are in good health.
"No medical exam" required does not mean no medical underwriting; it is usually for smaller face amounts where the insurance company does not want the additional exam expense. The company will rely on the answers given on the application and can deny coverage if you misrepresent your health.
The pros is that if you are in excellent health the medical underwritten policy should be really inexpensive. The con is that if something comes out in the medical evaluation you can be declined or rated higher than the quote you were given.
The pros for the non medical life policy is that you are guaranteed to be written at usually twice the amount of a medically written policy. The con of course is the cost and usually the shorter term.
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Medically underwritten policies will be less expensive if you have no major pre-existing conditions. Even if you did, it would make sense to go down that route to make sure you choose the most cost effective option
Life Insurance with medical exam is cheaper. With my company, one can only get up to $250k in coverage without medical exam. With that being said, we still require medical records when applying for non medical exam coverage.
In a nutshell, unless someone is looking to conceal medical facts (such as drug use) OR squeamish about giving blood, medical exam will provide the best coverage at the best price. Hope this helps.
Most of the time if they are underwritten policy can have a lower premium and a higher cash value.
The major differences of the non-medical life insurance are the cost and limitations to the face amount of coverage.
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