Life Insurance Without a Medical Exam

Goals

To understand the ideal customer for life insurance that does not require a medical exam (e.g., their age, income, etc.), their average age when they get their first policy and the average coverage, and their pain points.

Early Findings

  • No medical exam policies are designed for demographics of people who can’t be approved for traditional forms of life insurance coverage to obtain accelerated coverage with diminished benefits packages.
  • A recent survey of individuals who have not purchased individual life insurance found that the most common reasons why Americans don't have individual life insurance are as follows:
    • 58% think it's too expensive.
    • 43% consider the process of working with an agent to be too slow and 84% would prefer to purchase insurance online. However, other surveys call this trust in online insurance shopping into doubt.
    • 35% don't think they need it.
    • 24% are confused about how to apply.
  • 62% of Americans say no medical exam should be required to obtain life insurance, with most citing privacy concerns.
  • The survey's demographics were instructive:
    • 55% female, 45% male
    • 50% have children
    • Average age: 37
    • Average household income: $60,882
    • 71% currently have debt. The average amount is $54,654.
  • ChooseTerm.com uses a 50-year-old Male (non-smoker) applying for $100,000 of Life Insurance as its sample customer, which likely indicates that this represents their most common customer and policy as well. The monthly rates they would offer this hypothetical person:
    • A 10-Year Term Policy would be $47.24 .
    • A 15-Year Term Policy would be $56.64 .
    • A 20-Year Term Policy would be $74.56.
  • However, they note that insurer Transamerica will request an APS (attending physician statement) in lieu of a medical exam and discuss other variables.
  • Those under the age of 65 seeking a policy with coverage of up to $1 million, insurers want to confirm that the client has had a physical in the last 5 years and is in good health; policies of up to $50,000 are far more lenient on these requirements.
  • The ideal customer for a life insurance policy varies greatly on the type of policy (e.g., term, whole life, variable life, or universal life). Conversely, there does not appear to be an ideal customer for no-exam policies.
  • A review of our proprietary database of market reports finds several which detail the life insurance industry in the US (example); however, we do not find any which mention no-exam insurance in their table of contents or abstract.

Proposed next steps:

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