How Great is a Universal Life Insurance No Medical Exam Policy?

We want to let you in on a secret. Some of the best life insurance companies in the business are now offering their same products without the life insurance medical exam. 

No hassle. No fuss. 

How Does Universal Life Insurance Work?

Permanent life insurance has a handful of sub-categories – one of which is universal life insurance. 

Most people are familiar with whole life insurance. You pay a set premium each month, and the coverage lasts for your entire life. 

Universal life also lasts for life, but it offers more flexibility. You can adjust your benefits and premiums after the policy goes into effect. The cash value accumulation takes a more center-stage focus through various strategies of rapid growth. 

With universal life, part of the premium goes toward your life insurance. The other part builds your cash value accumulation. This grows over time, creating a cash pool you can borrow from, use to pay premiums, or cash out. How it grows will depend on the type of universal life you choose. There are pros and cons to the various strategies for taking advantage of your cash value. 

To see how other types of universal life policies work, check out our easy explanation of indexed universal life insurance. 

What is No Exam Life Insurance?

No Exam life insurance is a sub-category indicating that you won’t need to take the life insurance medical examination. 

Insurance companies typically require this exam as part of the underwriting process. It takes about an hour, and a paramedical examiner will record:

• Heart rate
• Blood pressure
• Height
• Weight
• Take a blood sample
• Take a urine sample
• Perform an EKG (sometimes)

One of the advantages of skipping the medical examination is drastically reducing the time between applying for a policy and getting the policy. This can make life more convenient when you just don’t have time. 

Another often-cited advantage of skipping the exam crops up when people start looking at life insurance towards middle age.  

These are two of our favorites based on their rates, the quality of their policy details, and how they treat their customers. Both Sagicor and Foresters are good companies to examine when you start shopping around for companies. 

Sagicor No Lapse Universal Life

Unlike a no exam term life insurance policy, you don’t have to worry about replacing or renewing your policy because you have lifetime protection.

NLUL offers a number of benefits and financial planning features through this product. Which include the following:

• Guaranteed Level Premiums – these premiums will never change through the life of the policy. They are locked in until age 120.
• Option to Select a Specific Period of time for Level Protection
• Income and Living Expense Protection for Dependents
• Funding for Mortgage Payments
• Provides Added Protection For Adverse Health Conditions as you Age

No Lapse Guarantee Protection

The Sage universal life insurance no medical exam policy comes with built-in lapse protection. Meaning if you miss a payment, you have a grace period to then send in your premiums. This grace period also prevents your policy from lapsing. This policy allows you to select death benefit protection for a specific period. Death benefit options are available for:

• Option A – Level Death Benefits
• Option B – Accumulation Value in addition to the Face Value Amount

The NLUL is ideal for both personal and business use planning.

Accelerated Benefit Insurance Rider Included

Additional coverage is provided through the Accelerated Benefit Insurance Rider. This rider is included at no extra cost. In other words, free. It can advance a portion of the insured’s death benefits due to a terminal or chronic illness.

You can only get up to 25% of the face amount under the accelerated benefits. It also caps out at $400,000. Benefits are subject to an administrative fee and payable as a lump sum.

NLUL Policy Eligibility

The Sage universal life insurance no medical exam is available for individuals who are between the ages of 15 days – 85 years old. However, the amount of coverage available does depend on your age.

Additional Life Insurance Riders

You can enhance and customize your life insurance coverage with the purchase of a life insurance rider. A rider is purchased separately from your main policy for an additional cost.

The riders which you buy with a Sage NLUL policy include the following:

• Accidental Death Benefit Rider – If you should die as a result of a covered accident, additional death benefits are payable equivalent to the face value of the policy (minimum amount must be $25,000) and will be payable to a maximum of $250,000. Issue ages are for ages 16 – 60 years of age. The rider will terminate at age 70. The cost of this rider is $0.12 per $1,000 of coverage.

• Waiver of Monthly Deductions Rider – This rider waives monthly deduction if you should become totally disabled. Disabled is specifically defined by the rider. You will have to provide proof of ongoing total disability to continue to qualify. The issue age is for those 16 – 55 years of age. The rider terminates at age 65.

• Children’s Term Rider – This rider is available for all children from 15 days old to age 19. It provides life insurance protection to age 25. You can also take advantage of a conversion option to convert your child’s term policy into a permanent one. Coverage can be bought for as much as 5X the amount of the rider’s face value regardless of the applicant’s current health. This is available only for fully underwritten applicants.

Riders may or may not be available in all states or subject to different state provisions.

Sage Universal Life Insurance No Medical Exam (NLUL) Underwriting Process

There are 3 possible underwriting procedures where you can apply for the Sage Universal life insurance no medical exam coverage, including:

Simplified Underwriting – No Medical Exam

This no exam life insurance application process is available for anyone between 16 and 65 years of age. Policy limits range from a minimum of $25,000 to a maximum of $400,000. Applicants are only required to complete an e-application, which allows for automated underwriting. Alternatively, you can complete a paper application, which then requires a brief underwriting interview. However, applicants must successfully qualify for one of 5 risk classifications, including:

• Preferred Non-Tobacco
• Standard Non-Tobacco
• Rated Non-Tobacco
• Preferred Tobacco
• Standard Tobacco

Full Underwriting

Sagicor requires a full underwriting process that entails a medical exam for applicants who are 66 – 85 years of age who are also applying for coverage, which is $25,000 or greater.

The full underwriting process will also be required for all individuals between ages 16 – 85 years of age who apply for policy face amounts of $400,000 or more. Meaning if you’re 65 or younger and applying for less than $400,000, you don’t need to go through full underwriting.

Those qualifying must fall within the following risk classifications including:

• Preferred Non-Tobacco
• Standard Non-Tobacco
• Preferred Tobacco
• Standard Tobacco
• Substandard rating up to Table 8

Juvenile Issue Underwriting

The issue age is available for 15 days of age to age 15 for face amount coverage of $25,000 – $99,000. Juveniles do not need to take an exam for this policy.

Guaranteed Interest Rate and Surrender Charges

The Sage universal life insurance no medical exam policy also offers a minimum guaranteed interest rate on the cash value accumulation portion of 2.5%, which is guaranteed payable over the life of the policy.

Surrender charges will apply if the policy is surrendered within the first 20 years of the policy being in force.

Sage NLUL Policy Loans

You also have the added advantage of being able to borrow against the policy as soon as it has attained a cash value amount. Loan interest is 6% for loans in arrears. Preferred loans are available for policies that have been in force for 10 years or more.

One partial withdrawal is also available after the first policy year and every year after that. A service charge of $25.00 will apply. The minimal partial withdrawal must also be at least $500, including the service charge.

Foresters

Foresters offers its SMART UL policy with a remarkable number of customization options. Applicants can choose to go through full underwriting. This opens up a few more possibilities like larger death benefits and increases the age range of applicants up to 85-years-old. 

Smart UL No Exam Policy Details

The death benefits come with a few options on the no-exam version of Foresters Smart universal life policy. First, the amount varies by age. 

• Age 0 – 15 = $10k – $150k
• Age 16 – 75 = $25k – $400k
• Age 76 – 85 = $25k – $150k

Then, you can choose between level death benefits or increasing ones. 

Level Benefits – The face amount stays the same, regardless of how your cash value builds. 

Increasing Benefits – Your total death benefit grows as your account value builds. Because you’re (likely) increasing the amount that will go to a beneficiary, this version has higher premiums. 

The other point of note is that the better health classes are not available with the no exam version. The only difference is between tobacco and non-tobacco. 

No-Lapse Guarantee

Foresters has a no-lapse guarantee preventing the policy from lapsing in the event the cash value cannot cover the monthly deductions. (Monthly deduction is Foresters’ term for the cost of insurance.) 

This lasts for the first 10 years of the policy. After that, you should have built up enough cash value to easily cover it, provided you don’t get over-enthusiastic about policy loans. 

In short, if something outside of your control goes wrong with the cash value, you won’t lose the policy. 

The criteria to keep this guarantee in effect is that you must pay the minimum premium each month. 

Charity Benefit Bonus

The majority of Foresters life insurance policies include a charity benefit provision. It neither adds premiums to your policy nor reduces the payout going to any beneficiaries. It’s just something they include automatically. 

Foresters will ask you to choose a charity when you take out a policy. You can change it at any time the policy is in force. 

When it comes time for benefits to pay out, Foresters will donate money to the charity of your choosing at the rate of 1% of the payout value. 

For example, suppose that a beneficiary will receive a $250,000 payout. Foresters will donate an additional $2,500 in the policy owner’s name to the charity they chose. 

Policy Loans

Foresters doesn’t make you wait to start taking loans from the policy. You can take one at any time, providing you have the available cash value. 

The maximum you can take is best described in a formula. 

Account Value – Surrender charges – (3x the most recent monthly deduction) – outstanding loan amounts and interest = Amount you can borrow

Surrender charges only apply for the first 15 years of the policy. Remember, the monthly deduction is the cost of insurance. 

The loan interest rates vary depending on how long you’ve owned the policy. 

• Years 1 – 7 = 4%
• After 7 years = 2%

Since it can take around a decade to build up significant cash value in a life insurance policy, a no-questions-asked loan at 2% is fantastic. 

When you repay the loan, you absolutely must specify in writing that the amount is a loan repayment. If you don’t, Foresters will assume you are making a premium payment. Don’t get caught here. 

You can choose never to repay the loan, but that interest will build year after year. 

Riders

Riders let you customize your policy to fit your interests better than a 1-policy-fits-all deal. Some come included, like the accelerated death benefit rider. Others are optional and cost extra, like guac at a build your own burrito restaurant.

Some states, like California, have restrictions on the riders available. Make sure to ask your agent what’s available in your state. 

Accelerated Death Benefit (Included)

The accelerated death benefit rider allows an insured to access their death benefit early. You often see this called chronic, critical, and/or terminal illness riders. Those all have different definitions depending on the insurer. But Foresters decided to lump them all together – making it much more straightforward for everyone. 

• Chronic illness – cannot perform 2 activities of daily living for at least 90 days or has severe cognitive impairment
• Critical illness – diagnosed with any of the following:
  • Life-threatening (invasive) cancer
  • Myocardial infarction
  • Stroke
  • Advanced Alzheimer’s Disease (before 75th birthday)
  • End-stage renal failure
  • Major organ failure
  • ALS
• Terminal illness – less than 12-month life expectancy

For critical and terminal illness diagnoses, the insured can withdraw up to the lesser of 95% of the eligible death benefit or $500,000. Chronic illness limits withdrawals to up to 24% of the eligible death benefit. 

These reduce the amount of death benefit passing on to a beneficiary. 

Family Health Rider (Included)

The family health rider helps cover the cost of natural disaster-related injuries for anyone in the family. 

Qualifying natural disasters must be recognized and recorded by the U.S. Geological Survey or the National Weather Service:

• Typhoon
• Hurricane
• Tornado
• Earthquake
• Volcanic eruption
• Tsunami
• Lightning Strike

It will pay up to $650 per person with a total limit of $5,000 for the whole family. The qualifying events are as follows:

• Ambulance transportation – $50
• Hospital emergency room exam – $100
• Hospital stay – $100 per day for 5 days

Common Carrier Accidental Death Rider (Included)

If the insured passes away from an accident from what the insurance industry calls a common carrier (think taxi or airplane) as a fare-paying passenger, Foresters will pay extra benefits. 

The extra benefit is either twice the face amount or $300,000 – whichever is less. 

Accidental Death Rider

This rider offers an additional death benefit for accidental causes of death. Foresters puts a time limit on it. The insured has to pass within 180 days of the accident. 

It provides the lesser of an extra $300,000 or doubles your face amount. 

Waiver of Monthly Deductions

Here is another terminology deviation. Most carriers label this “waiver of premiums” rider. This rider refers explicitly to the part of your premiums that go toward your cost of insurance. 

In the event that the insured suffers a total disability (loses the ability to work), Foresters waives the cost of insurance payments. 

To qualify, the insured must be disabled for at least six months. A doctor determines whether the insured counts as disabled. Then Foresters will have the final say if the disability meets their definition of disability. 

The waiver lasts for the entire time the insured remains unable to work, up to age 65. 

Children’s Term Rider

You can add this rider when filling out your own application or after the policy is already in place. 

It’s term life insurance covering any children or stepchildren of the insured. The benefits offered range between $10,000 and $25,000 in increments of $1,000. 

The covered child(ren) must be at least 15 days old and less than 18 years old. They’ll need evidence of insurability. 

This rider has a conversion option where a child can convert their term, which expires at age 25, to a permanent policy with higher benefits. It does not require evidence of insurability. 

Guaranteed Purchase Options

Foresters offers this rider for younger people who expect to earn more in the future. This way, applicants can cover their families with an amount that makes financial sense at the time. Then, as they advance in their career, opportunities come up that can increase the policy’s benefit amount without further underwriting. 

At ages 25, 28, 31, 34, 37, and 40, the insured can increase their life insurance by the lesser of the face amount or $50,000. 

The catch is you have to use this by the insurance anniversary at age 40. That’s when the rider ends. 

How to Learn More

If you have any questions about whether this would be right for your family or not, give us a call at Abrams Insurance Solutions. We can see if a universal life insurance no exam policy available through Foresters or Sagicor Life Insurance Company is a good fit for your situation.

We can also provide information on other types of no-exam life insurance policies. Because as independent agents, we have access to over 70 of the industry’s top-rated life insurers. If you are looking for life insurance without a medical exam with a higher benefit, look into these $500,000 term life no medical policies.

Call us today at 858-703-6178 to learn more about universal life insurance no exam policies. We are here to answer questions and can give you pricing ideas with no obligation.