No Exam Term Life Insurance

No exam term life insurance offers many short and long term options. Even though plans can offer rate guarantees as long as 40 years, the ten year, no exam term life insurance plan seems to be the most popular. And the state of the economy does not seem to make that much of a difference either. When it comes to life insurance, it seems that people just want to pay as little as they can in premiums and the 10 year plan offers those low premiums.

The 10 year plan can be a very good choice because of its low premiums but what will happen in ten years when the policy guarantee period expires and rates are much higher than originally paid. Now, if you really are on a very tight budget and all you can only afford is a 10 year term, then, by all means, select that plan. But if your budget can handle longer guarantees and your projected need is longer that 10 years, I strongly recommend that you lock in your rates for as long as you feel you will need the insurance.

We have seen situations were a 30 year old had the option to pay either $12/month for a ten year guarantee, no exam term life insurance plan or $16/month for a 30 year plan, and this individual selected the 10 year plan to save money. That is simply irresponsible and short sighted. When that same young fellow is further advised that the 30 year plan would be a much wiser choice, he/she often replies that they will probably make the switch to a longer plan in a year or two. Problem is, people generally never do make the switch to a longer plan and at age forty, that no exam 10 year life insurance plan has much higher premium payments!

Which no exam term life insurance plans are best?

Here is what you should simply consider when trying to decide which plan to select:

• How many years of coverage do you need? Whatever you come up with, always add another 40% to the number you come up with as you will probably be way off. Please don't decide how many years of life insurance you need by the length of the mortgage you just took out? Your need should be based on year of income replacement needs. After all, your income is the one paying the mortgage.
• How much coverage do you need? That is a very important part of your decision. That is one part of the decision where, if you need $250, 000 in no exam term life insurance and all you can afford is a 30 year, $100, 000 plan, then forgo the 30 year plan and select the n exam term life plan that allows you to afford the face amount you need. By the way, a basic face amount is your net income times 18 if you are 55 and under or your income times 10 if you are over 55. More on that in another article. Don't worry, you are really not likely to be over insured. And if you are applying for too much life insurance, unlike what many may think, the insurance company will let you know by denying the full amount you are requesting.
• Is the plan convertible? In other words, if you later decide that you want to have a much longer plan, can you convert your no exam term life insurance plan to a permanent plan of insurance (universal life, whole life...) - without any proof of insurability? Unless you are 100% certain that you will not need longer coverage than your term life insurance plan offers, you must make sure that your no exam term life insurance plan is convertible to a quality permanent life insurance. That option is less common with no exam life insurance, so please check.

What happens if you are not in good health. Then which plan is best?

Again, for the most part, the advise above applies. One thing you should consider though. If you do get approved for no exam term life insurance and get a good deal, you should select the longest no exam term life insurance plan available. In this case, even if this will give your budget an extra stretch. Why do I say that? Simply because, if you are not in good health today, you are not likely to be in any better health tomorrow. Which means that your rates are likely to go very very high when it is time to redo that term policy after the guarantee period. As a matter of fact, you may even want to consider a no exam universal life insurance instead of no exam term life insurance. In all cases, you must make sure that the no exam term life insurance is convertible to permanent insurance.

So, please, when it comes to no exam term life insurance, just because it can be placed in force fast and, in many cases, easily, does not mean that, your decision to select the right plan, should be rushed. And as we say in all of our articles, ask, ask ans ask more questions. Be well and live a long life.

Philippe Deray - About the Author:

Philippe Deray is President and CEO of MCD Financial Services and MCD Life. Our web site address is http://www.mcdlife.com

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