No exam life insurance is a type of life insurance that can be applied for entirely online, without the need for a medical exam. However, just because you don’t need to undergo an exam, your health is still taken into account when your life insurance premiums are being determined. Another factor that you may be surprised to learn affects life insurance premiums? Good credit.
When applying for no exam life insurance, specifically, a term policy, underwriters take both your health and credit into account. The reason they do this is to assess the risk that the applicant poses to the company. If someone is in poor health and the chances that they will claim the death benefits are high, the premiums go up. If someone is in good health and the risk that they will claim the death benefit is low, their premiums are commensurately low as well.
Why Credit Matters When It Comes to No Exam Life Insurance
Just like someone in poor health poses a risk to a life insurance company, so does someone with poor credit. Insurance companies are wary of people who have poor credit or who have gone bankrupt for very practical reasons. First, from an insurer’s viewpoint, someone who is careless with money might also be careless with their life. While there is a big leap from money to self-preservation, insurance companies leave no stone unturned when assessing risk.
Second, the very nature of term no exam life insurance requires monthly premiums to be paid on time. If someone has poor credit or has accrued debt, the insurance company is taking a risk — maybe that person won’t pay their premiums on time as well? In some cases, extremely bad credit can be enough for an insurance company to reject an application. In cases of mildly bad credit, an insurance company may penalize the applicant with higher premiums.
The bottom line is that in most cases, a low credit score will not be grounds for a rejection of a no exam life insurance application. It can, however, mean that the applicant will be given higher premiums.
If you don’t have the best credit and want to see what kind of premiums you would pay for no exam life insurance, click here.
Can You Get No Exam Life Insurance If You’ve Gone Bankrupt?
If you are currently in the process of going bankrupt, there is a good chance that you will be denied a term no exam policy and a traditional policy. Insurance carriers simply view this stage of your life as too risky. It may be a good idea in situations like this to work with a Harrisburg bankruptcy attorney to help provide legal counsel while navigating the complexities.
However, if you filed for bankruptcy more than a year ago and can prove that you have a current income, you should be able to get approved for either type of life insurance. Alternatively, there are types of Guaranteed Issue no exam life insurance that offer coverage to virtually anyone who applies. If you want to make sure you have some sort of life insurance in place, you can apply for Guaranteed Issue.
Increase Your Credit Score to Get a Lower Premium
According to the insurance experts at Sproutt, if you’re considering buying life insurance now, do not delay. Who knows what will happen tomorrow? However, if you have bad credit, there are several things you can do to boost your credit score and achieve better life insurance rates:
- Eliminate high-interest debt in favor of lower interest options
- Consolidate debt
- Pay bills on time
- Check your credit report to make sure it’s accurate
- Minimize use of credit cards so you don’t accumulate debt
If you buy term no exam life insurance and get the rates of someone with bad credit, you can always improve your credit score and submit it to the company. Once your score has improved, you can qualify for lower rates.
No Exam vs. Traditional Life Insurance
When it comes to no exam life insurance, both credit and health play a role in determining the size of your monthly premiums. The good news is that these factors tend to matter less for no exam life insurance than they do for traditional life insurance. With no exam life insurance, approval is usually easier than traditional, whether you’re in poor health or have poor credit. However, while approval is easier, you still owe it to yourself to achieve the best possible state of health and finances before getting life insurance. This way, you’ll get the best rates possible.