Life Insurance Exam
Have you noticed how some insurance companies keep on promoting their “no medical examination needed” insurance plans?
If you are going to invest in an insurance plan, chances are, the company will require you to take a life insurance medical examination to be conducted by a medical professional (normally in your own home). This procedure will provide the company additional details about you that will help it validate the information you have provided; it can also expose some potential risks to your health that were previously unrecognized.
Insurance companies require individuals who are applying for comprehensive insurance coverage to take a medical exam in order to get information about the client that they will use in assessing the liability of the would-be policy to the company. Though some people perceive this to be an inconvenience, there is no difference between an insurance company doing this exam and you checking the quality of the food that you are going to buy in the grocery store, if you really think about it.
And though some insurance companies try to promote plans that require no life insurance exams, bear in mind that most of these claims would only cover limited expenses such as funeral costs and a cash benefit of around $50,000. If you are looking for a more comprehensive life insurance, then you would probably have to undergo a life insurance exam.
Normally, people over 50 years of age find it difficult to obtain an insurance coverage because insurance companies would normally assess the advanced years as a liability. This age bracket becomes the market for the plans that profess “zero medical exams” required. But did you know that if you belonged to the same age group and possessed a healthy constitution, you can get yourself a life insurance plan (with medical exam) that can give you better coverage?
Contrary to what people think, submitting to a medical examination can result to a better policy or give you lower premiums for the policy that you are angling for.
But why do insurance companies require a life insurance medical exam in the first place?
When a person in his prime working for a living and who happens to be the main income earner in the household dies, the benefits that the insurance company pays out to his family can be considerable – this is due to the lost salaries, remaining loans and potential expenses of dependents that will be factored in. Because this payout can be quite significant, the insurance company also ensures that there are no medical risks present that could have contributed to the untimely demise of the insured person.
On the other hand, if the insured person is older, the payout can be reduced considerably because the fixed expenses of the insured are reduced. From this scenario, we learn that it is actually more advantageous for an insurance firm for the insured to live longer, because this reduces the liability when they provide cash benefits to the dependents.
This is exactly why insurance companies require an examination for their comprehensive plans. The results of your medical exam can influence the acceptance of your life insurance. The negative result however can also be used as a basis to provide you the insurance at much higher premiums than you were hoping for.
Sometimes, managing our finances in preparation for the future can be taxing, like in acquiring a life insurance. If you are determined to take on a life insurance plan as part of your financial preparation, make sure that you choose a company that you are comfortable to work with, and be clear about its guidelines regarding life insurance exam.
Remember that at the same time you are safeguarding your future finances by investing in a plan, the insurance company is also gearing for the business impact of adding you on to their roster of clients. Try to meet halfway in terms of the policies for a win-win situation for both you and the firm.