If you are talking about insurance myths, most people think of a car or real estate insurance myths. But because of the increasing price of medicines, medical procedures and hospitalization, people should start focusing on misinformation and myths about “No Medical Life Insurance.” Before anything else, let’s answer the question “What is a “No Medical Life Insurance” policy”? It is a type of insurance in Canada that does not require any medical test. There are two types of No Medical Life Insurance policy:
This kind of insurance policy doesn’t have a medical exam, but patients are required to answer medical questionnaires. You need to complete a series of questionnaires based on your current medical status, the preconditions and your medical history.
It is a kind of medical life insurance that does not need any medical exam or don’t require you to answer medical questionnaires. In short, it is available for everyone. But because this kind of insurance is accessible to anyone, they have higher premiums and lower coverage. So, here are 6 tips on buying no medical life insurance and the myths behind them.
Myth: People with medical preconditions needs a No Medical Life Insurance
Answer: False. Many people with pre-existing conditions are still allowed to apply for a traditional rate life insurance policy. It is more expensive than a standard policy but much cheaper than ordinary medical life insurance. People with pre-existing conditions like diabetes, heart diseases, Alzheimer, dementia or Cancer can apply freely for the rated traditional insurance policy.
(If you want to know what are the criteria of pre-existing conditions, visit https://www.healthcare.gov/glossary/pre-existing-condition)
You can get a type of insurance if you’re terminally ill. You can find insurance policies that pay their customers even if they are terminally ill. But you have to make sure that you don’t die within two years to get the full benefits the insurance policy offers. If the customer died before the two-year waiting period expires, your beneficiaries would still get the premium that you paid but not the full benefits. The clause differs among policies, so you need to study the policy carefully, you are planning to get.
Myth: No medical life insurance means you don’t need to do a medical exam or answer medical questionnaires to be approved.
Answer: False. As mentioned above, No Medical Life Insurance policy has two types. A simplified issue or an insurance policy that doesn’t require a medical exam, but needs you to answer specific questionnaires, and Guaranteed Issue or an insurance policy that doesn’t require both medical exams and answer questionnaires.
Myth: No Medical Life Insurance is expensive
Answer: False. Although it costs at least $1,000 per coverage, it is much cheaper compared to standard medical life insurance.
Myth: Getting a No Medical Life Insurance policy means you are automatically covered.
Answer: False. Majority of simplified issue insurance policy and all guaranteed policies have at least a two-year waiting period. Meaning, if something happens to you that will lead to your death within the two-year waiting period, your beneficiaries will receive the premium that you paid into the policy. But since there is a two-year waiting period and you died before the waiting period is over, they will not receive any benefits of life insurance they that goes with it. It is to avoid terminally-ill patients who knew they would die within two years to get life insurance to get money for the people they will leave behind. It is a bit harsh, but the reality is, insurance works because insurance companies need time to invest the money that people pay as premiums. If a terminally-ill patient get insurance and they died the next day, the company will be obliged to pay the amount of the dividend that is paid to them. And since they didn’t have enough time to invest that money, sooner or later the system will collapse because the company don’t have enough money to cover all who avails the policy.
Myth: No Medical Life Insurance offers the same amount coverage as the traditional life insurance policy.
Answer: False. Because most of the people who avail No Medical Insurance policy have pre-existing conditions, insurance companies limit the amount of coverage. No Medical Life Insurance policy often covers the final expenses of the family during the wake and burial, the payment of debts and legacies. Traditional life insurance can cover up to a million, depending on the premium paid. Simplified issue no medical insurance policy can offer between $200,000 and $300,000. Meanwhile, guaranteed issue is capped at $20,000 to $25,000.
(To know how much life insurance you will need, visit www.forbes.com)
Myth: All No Medical Life Insurance has the same policies.
Answer: False. Live insurance has different policies. For example, different simplified issue policies use a different questionnaire to assess their customers. The coverage, aspect of the policy and the cost differs depending on the company. You have to make sure that you hire the best insurance broker to help you find the most qualified medical life insurance that suits your needs and budget.
Myth: It doesn’t matter whether you get your insurance policy with the help of a broker, an insurance call center or a sales agent, as long as I get the best No Medical Life Insurance policy.
Answer: False. It is one of the biggest myths in the insurance world. Whoever helps you get a life insurance policy will make a big difference. The broker or agent will have your authorization to find and deal with different insurance companies. They should provide you with different options or choices. They know what insurance policy is suited for your needs and budget. They also know whether you have pre-existing conditions and decide what policy is best for your situation. On the other hand, these brokers and agents are obliged to sell you the insurance policy of their company, making it difficult to get an unbiased perspective and price.
(Click here to know more about Life Insurance.)
No Medical Life Insurance policy is not only for people who don’t have money to get a regular insurance policy. People choose No Medical Life Insurance policy because they don’t want to undergo a medical exam before they can use the insurance policy. They want an easy-to-get policy without the lengthy underwriting process.