Best no medical life insurance Canada plan in 2023

Whether you prefer not to disclose your medical history, worry about the effect of a pre-existing condition on monthly premiums, or feel uncomfortable in a medical setting, no medical life insurance policies can seem like the ideal solution to ensure that you have coverage to protect your loved ones. 

The convenience and confidentiality come at a cost, however, and it’s important to fully understand the limits of no-exam life insurance before purchasing.

In this guide, we’ll review the benefits and drawbacks of purchasing term or whole life insurance without a medical exam.

What is no medical exam life insurance?

Simply put, “no exam” life insurance is a type of life insurance that does not require a medical exam in order to purchase coverage. Instead, the insurer will assess your overall health and level of risk based on your responses to a health questionnaire, your prescription history, your age and other indicators.

If you’re young and healthy and hoping to purchase life insurance with no health exam in order to speed up the application process, this may be a reasonable option for you. Likewise, if you’re in poor health or prefer to keep your medical history confidential for personal reasons, purchasing life insurance with no medical exam can protect your privacy and your wallet.

Some insurers will compensate for a lack of information by limiting your coverage or, in some cases, charging higher premiums. These may still be lower than what you would pay if you underwent a medical exam, however.

Some insurers will also require a waiting period before extending coverage. These waiting periods can last up to two years, during which you will need to pay premiums. If you should pass away before the policy comes into effect, however, the insurer may refund these payments.

Types of no-exam life insurance

No medical exam life insurance in Canada comes in three varieties, each with its own benefits.

• Simplified issue life insurance. Simplified issue life insurance may be the most efficient route to a life insurance policy. No waiting periods, no extensive medical questionnaires and no medical exam. Because insurers can only approximate the risk of issuing a policy, you’ll pay higher premiums than for other types of life insurance.

• Guaranteed issue life insurance. Guaranteed-issue life insurance policies provide a small amount of permanent insurance to anyone who applies, regardless of age or health. Policies usually don’t exceed $50,000, and many people purchase them to cover funeral expenses, estate taxes or other end-of-life costs they don’t wish to pass on to loved ones.

• Accelerated underwriting life insurance. Sometimes called “express underwriting”, accelerated issue life insurance streamlines the application process by eliminating the need for a medical exam if you’re in good health. Instead, the insurer reviews a lengthy questionnaire and verifies your responses against medical databases to assess the risk of insuring you. Policy premiums usually match what you would pay for a regular term life insurance or whole life insurance policy. If you’re looking for affordable life insurance with no medical exam, accelerated underwriting is your best bet.

To better understand the different types of whole life insurance with no medical exam and term life insurance with no medical exam available, it may help to see a side-by-side comparison:

What are the pros and cons of life insurance policies with no medical exam?

Before purchasing life insurance in Canada with no medical exam, it may help to evaluate the pros and cons of this type of financial protection.

While most people, particularly those with financial dependents, need life insurance, the time saved by skipping a medical exam may not be worth the increased monthly premiums. For those who need insurance quickly, however, or who prefer to avoid invasive questionnaires, no exam insurance may be the better choice.

Not sure if no exam medical insurance is right for you? Speak to a qualified financial advisor.

Who should buy no-exam life insurance?

While the idea of term life insurance with no medical exam may seem convenient, particularly if you’re in a hurry or prefer not to share personal information, it’s often a more expensive option than a traditional policy.

For non-smokers in generally good health with conventional jobs and low-risk hobbies, conventional life insurance is likely the better bet. The time and effort involved in completing a medical exam pay off in the form of more comprehensive coverage and lower monthly premiums.

If, however, you have a health condition and worry that disclosing this information might lead to a denial of coverage altogether, the higher premiums attached to no medical exam life insurance may be worth the peace of mind. Likewise, if you’re purchasing insurance primarily to ensure that your loved ones won’t bear the financial burden of a funeral or estate taxes, a simple guaranteed life insurance policy can be cost-effective.

How much does no-medical life insurance cost?

Rates for no-exam life insurance, like all insurance, will vary depending on the insurer’s risk tolerance and, in the case of accelerated underwriting or simplified life insurance, your responses to a health questionnaire.

A 35-year-old man can expect to pay around $85 a month for $500,000 of coverage under a no-medical exam policy. His premiums for a conventional term life insurance policy offering the same amount of coverage are likely closer to $35 per month.

How long do no-medical life insurance policies last?

The length of your no-exam life insurance policy depends on whether you’ve purchased permanent insurance.

Patricia purchased a guaranteed issue life insurance policy with $25,000 worth of coverage to pay for her funeral expenses. Because her beneficiaries will receive a death benefit no matter when Patricia passes away, she has a lifetime, permanent coverage.

Jean purchased simplified term life insurance valid for 25 years. Once the term passes, he will need to either renew his coverage or purchase a new policy, Jean, therefore, does not have permanent coverage.

In general, if you purchased no exam whole life insurance, you can assume that your policy will cover you for the remainder of your life - whether that’s five or fifty years. If you purchased no exam term life insurance, however, your coverage lasts for the validity - the “term” of the policy.

Can you borrow money from a no medical life insurance policy?

In order to borrow against your life insurance policy, the policy must accumulate a cash value. Whole life insurance and universal life insurance policies both include a cash savings component from which you can borrow, regardless of whether or not you underwent a medical exam.

Term life insurance, on the other hand, does not have a cash savings mechanism. Whether you visited a doctor when applying for coverage or purchased your term life insurance with no exam, you can’t borrow against these kinds of policies.

How much life insurance can I get without a medical exam?

Coverage amounts for no-exam life insurance vary depending on the insurer, however, most policies don’t exceed $500,000. Some accelerated underwriting life insurance policies can reach $1 million, but these are the exceptions.

Compared to conventional term and whole life insurance policies, which can reach millions of dollars in value, this may not seem like much. If it’s your only option, however, that’s certainly better than no coverage at all.

Why less coverage? Because insurers have less information about you than they would if you completed a medical exam, it’s more difficult to accurately assess the costs of insuring you. Remember, all insurance works by pooling risk. When insurers don’t have much information about you, they have to assume that you’re a high-risk candidate in a pool of other high-risk individuals in order to protect their liquidity. In practical terms, this means higher premiums and lower coverage.

Can I get life insurance with a pre-existing health condition?

Individuals with pre-existing conditions, including diabetes, asthma, or high blood pressure can still qualify for term life insurance if they opt for guaranteed or simplified life insurance policies. Both of these no-medical exam options forego a medical exam and comprehensive questionnaire in favor of a quick series of basic questions about your overall health.

Note that guaranteed life insurance coverage seldom exceeds $50,000. Simplified life insurance usually charges higher monthly premiums than a conventional policy due to the higher risk.

Can I be denied a no medical life insurance policy?

While insurers can deny you coverage when you apply for a no-medical life insurance policy, it’s rare.

Companies understand that many of the people opting to purchase no medical life insurance may have pre-existing health conditions or other lifestyle factors that make obtaining traditional coverage difficult and have developed sophisticated tools to help evenly distribute costs and risks to make life insurance available for all Canadians.

If you’re applying for guaranteed issue life insurance the insurer cannot deny you coverage provided you’re not above a maximum age. On the other hand, you may be denied accelerated underwriting life insurance if a review of your medical records reveals discrepancies in your application questionnaire.

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Alexandre Desoutter

Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.