No Exam Life Insurance for Parents

Written by CFA Insurance

If you’re interested in getting life insurance for your parents, you have more than a few options. There are many different types of life insurance to choose from, which is why it’s essential to do your research. Taking the time to really understand the types of life insurance is important and directly impacts the type of coverage they receive. 

Specifically, we’ll be taking a look at no exam life insurance for parents. No exam life insurance allows you—or your parents—to skip out on the medical exam. This is especially useful for people who may not receive coverage otherwise. This can be due to medical conditions that would cause an increase in insurance costs. It is also used out of convenience so you don’t have to go through the trouble of a medical exam. 

This works because life insurance companies have higher premiums for insured individuals who are not healthy. If your parents have serious illnesses or any medical issues, they are riskier for the insurance company to insure. By your parents not having a medical exam, the insurer has no idea how great of a risk it is to insure them. 

In order to get your parents insured, you must have their consent. There is no way to go around this. Insurance companies will only allow you to get insurance for your parents with their approval. This should be one of your first steps so that you can make sure you and your parents are on the same page. You will also need proof of insurable interest. This essentially proves that you would be impacted financially if they were to pass away. 

You should also make sure you know about all the different types of life insurance you could get for your parents. This will help so that you can explain each to them. Then, you can work to find a great fit. 

Let’s see all of the different no exam life insurance options available for your parents. Learning about them will help you to make an educated decision about what is best for your parents. 

What Type of No Exam Coverage Can My Parents Get If They’re Healthy

If your parents are healthy, it will be much easier and much more affordable to get life insurance on them. Life insurance companies want to insure healthy people because the risk is lower. Here is what you should know about no exam coverage for your parents if they are healthy. 

Simplified Issue

One type of life insurance coverage you can get for your parents if they are healthy is simplified issue. 

With simplified issue, your parents will be asked a few questions about their medical history. This is a simple alternative to a medical exam. These questions may cover things like smoking, terminal illness, AIDS, HIV, and long-term care. Depending on how your parents answer these questions, they may or may not be insured. 

When your parents get through the medical questions, they will be able to get coverage after just days or weeks. Other types of insurance can take months. This also means that they will get an answer regarding their medical questions fairly quickly. This is nice because you won’t have to wait long to find out whether or not you need to look for another policy. 

Later, we will go over guaranteed issue life insurance, which is less affordable. One positive factor about simplified issue is that it is more affordable than guaranteed issue. This is the less expensive type of no medical exam life insurance. With all no medical exam insurance options, you will be paying a bit more, but simplified issue is one of the more affordable options. 

Another positive factor about simplified issue is that the face value of the death benefit becomes available immediately. With some types of life insurance, you would have to wait. With simplified issue, it’s available as soon as your parents are insured. This is one less thing for you and your family to worry about. It’s all set up from the start. 

Simplified issue is a very quick and simple type of life insurance to get. Without a medical exam, you and your parents can save a lot of time. The medical questions are short and very straightforward. They shouldn’t take long at all and your parents will get insured quickly as long as they are healthy. 

What Type of No Exam Coverage Can My Parents Get If They’re Not Healthy

If your parents are not healthy, you will have a harder time finding life insurance for them. It will often cost more money because it is a bigger risk for a company to insure them. Not all life insurance companies will qualify those with serious medical conditions. 

Still, there are options so that your parents will definitely be insured. You don’t have to worry about them being completely denied. It’s trickier and more expensive to get them insured if they are not healthy. 

Here is what you should know about no exam coverage for your parents if they are not healthy.

Guaranteed Issue

One of the policies that your parents can get if they are not healthy is guaranteed issue. It’s important to note that guaranteed issue should only be used in worst case scenarios. For example, if you can’t seem to get your parents insured in any other way, you may have to go with guaranteed issue. 

This is the last resort mostly because of the cost. Once again, an exam is not required. Neither are any medical questions. This means that your parents are guaranteed to be insured no matter what. This is true regardless of their health status, history, or any conditions they may have. This also means that the insurance company is taking a big risk. 

If your parents could not get insured by any other means, they are risky to insure. You may have tried several types of life insurance and could not get your parents approved. That’s when guaranteed issue comes in handy. 

Certain health conditions can make people uninsurable otherwise. If your parents have serious health issues, it’s possible that you will need to go with guaranteed issue instead of any other type of insurance. 

It is a nice option to have if you have run out of all your other options. Just make sure that you don’t try this first. It should be used as a last resort if you can’t get your parents insured in any other way. Regardless of your parents’ current or past health status, they are able to be insured with guaranteed issue. 

Since your parents’ health status doesn’t affect the outcome of their insurance status, the process is very quick. Your parents may be approved within days instead of weeks. It’s a very quick and simple way to get life insurance, which can be convenient. 

Something to consider is that you may have limited coverage options. Some life insurance policies offer a good amount of coverage, but you may not have as many choices with guaranteed issue. Still, your parents can get at least some coverage, which will help a little bit. This will depend on the company you go with and their policy options. 

Recommended Options if Not Qualified for the Simplified Issue

Not everyone is qualified for the simple issue so you should have a backup plan. You should know what to try next so that you can get your parents insured as efficiently as possible. There are two main options that are recommended if your parents are not qualified for simplified issue. These options aren’t bad ones, but they should be used later if the simplified issue doesn’t work out.

First, try to get simplified issue. If that isn’t a possibility, you can choose between term life and guaranteed universal life. 

Term Life 

Your first option is term life insurance. This is a type of insurance that is purchased for a set term or amount of time. Coverage is provided at a fixed rate for the duration of the term. Often, these terms are 10, 20, or 30 years long. This varies by company and policy though. Term life doesn’t offer lifelong coverage, but you can choose the duration that seems best for your parents. 

Term life is an affordable type of life insurance, but it still offers the coverage your parents need. It’s less expensive because it’s temporary. It also doesn’t have cash value because it’s set to a term instead of being set to whenever your parents pass away. Still, a payout is guaranteed so you will get what you need. 

Guaranteed Universal Life 

Guaranteed universal life is another affordable life insurance, but it is a permanent option and will last for the duration of your parents’ lives. It’s slightly different than other permanent options. With guaranteed universal life, you will choose a certain age to get coverage for your parents. This may be 90, 95, 100, 105, or 121. There will be a death benefit up to that age. 

The premiums don’t rise so you can expect to pay the same amount for the duration of the policy. Some companies will offer preferred rates for non-smokers, which is helpful at reducing the cost. Like term life, guaranteed universal life does not accumulate a cash value. 

Why Get Life Insurance on Your Parents?

There are many reasons you may choose to get life insurance on your parents. What’s most important is that you have good reasoning and goals and are working to meet those goals by getting life insurance on your parents. If not, there is no reason to get life insurance on them, is there? 

One of the major reasons that you may get life insurance on your parents is to cover their final expenses. This would include medical expenses as well as the funeral and burial. If either of your parents ends up in hospice, you will also be able to cover that with life insurance in most cases. 

It’s important to understand how costly funeral and burial expenses are. Too often, adult children under-budget for these final expenses. To know how much life insurance to get on your parents, you should look into average costs in your area. Get a safe amount of coverage so that you aren’t trying to scrounge up the extra money if it becomes necessary. 

Another reason you may get life insurance on your parents is to help pay off some or all of their mortgage. This is very important if you will be the one getting the house. If a life insurance policy comes with a high death benefit, you will have leftover money to put toward that mortgage. 

If you don’t have your parents’ life insurance policy to pay for the mortgage, you could lose the house. You may be forced to sell it if you don’t have the funds to cover the mortgage. This could be very hard, especially if the home has a strong significance to you. 

A life insurance policy can be a way to replace your parents’ income if they are providing for you in any way. Your parents’ other dependents will suffer without your parents’ income as well. When you have life insurance, the lost income is then covered. You should note that this isn’t necessary for all situations. If your parents are retired, they aren’t bringing in income so this won’t be a concern in that situation. 

Once your parents die, if you are taking responsibility for the inheritance or estate tax, you will be paying taxes. Life insurance can come in handy here so that you aren’t left with that financial burden at a stressful time. This is especially useful if your parents’ net worth is high. There is a limit at which you will have to start paying taxes. This varies so you should take a look at your specific situation.  

When your parents do pass away, you will be going through a lot. Worrying about your finances and covering their final expenses will just add more stress to an already difficult situation. By taking the initiative and making sure they have life insurance, the burden will be lightened. You will be able to grieve and make adjustments to your life without being too concerned about the financial aspects. 

About Jason Hill
About Jason Hill

Jason is the founder of CFAinsure. His years of experience in the business have helped him serve and represent hundreds of clients. Jason ensures his clients are well educated and informed by putting their needs first. Each appointment is tailored to individual needs, via specific materials and educational tools. The real benefit for his clients is the end result: peace of mind.

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