We all see advertising on a regular basis offering life insurance without an exam. I can tell you personally I am not a big fan of having blood drawn and peeing in cups either, so I understand the appeal.

What they obviously aren’t going to share with you is the cost of convenience. They also don’t make it very clear that, opposite of most people’s assumption, just because they don’t draw blood doesn’t mean they aren’t going to investigate your health.

First let’s address the cost of convenience. Just to keep things apples for apples I am going to quote the same amount of insurance and term length with a company that offers insurance with and without exams. For this example we will use Liberty Life.

For this example we will assume a 40 year old male in great health. Just hates the hassle of an exam (they aren’t really a hassle by the way). If he gets a simplified issue (no exam) policy for $250,000 of 20 year term insurance it will cost $775 annually. If he gets the same amount with a fully underwritten (exam) policy it will cost $365 annually. So, the cost of convenience is $410 per year for 20 years, $8200 just so he didn’t have to pee in a cup.

As to the other issue. A lot of people assume that no exam means the company doesn’t care about your health. Nothing could be further from the truth. We’ve already seen that they are concerned enough to hedge their bet by more than doubling your rates. They are also going to check with the medical information bureau to see if there is any health issue that maybe you haven’t shared with them. They also reserve the right to obtain medical records. They want your business, but they’re not being stupid about it. They will decline you at the slightest bit of discomfort about your mortality risk.

Bottom line. If it sounds too easy, it’s going to cost you. If you see it as a loophole, it’s likely to snap shut on you. Suck it up and do the exam.