Equote - David Livingston

A life insurance policy is defined as the equitable transfer of risk (of a loss) from one entity to another, in exchange for a payment. That means, it is a form of risk management bought to cover certain risk such as the death of the insured or some critical illness. Under this scheme, certain amount known as the premium is paid to the insurer at regular intervals and in return, the insurer promises to pay certain amount known as benefit on the occurrence of the insured event. 

However, certain policies also provide capital building opportunity to the policyholder and such policies are known as life assurance policies. In fact, a true life insurance policy does not provide anything other than death benefit and if the death does not take place while the policy is still valid, no return can be claimed. However, the assurance policies return money because of the cash value it has accrued. May be this is the reason why such policies are called assurance policies instead of life insurance.

However, all these differences are rather too technical. We usually treat all types of policies only as life insurance policies. The experts have divided these policies under two distinct categories:

1. Temporary Term Life Policies – These are pure life insurance policies, which provide a handsome return at a very reasonable cost. If you get life insurance quote for different types of policies, you will know that they are the cheapest of all. However, these policies are valid for a fixed term and do not provide any return unless the insured dies within that term.

2. Permanent Life Insurance Policies – These policies are valid for the life of the policy holder.  So they provide benefits whenever the insured dies. Moreover, they accumulate a cash value by using part of the premium you pay. Consequently, they can be cashed out after stipulated years. However, because a part of the premium is used to grow the cash value, they are always overpriced.

Indeed, these permanent policies are actually the life assurance policies that we have been earlier talking about. Depending upon the mode of investment and amount of return, you can have different categories of such policies. Among all, the whole life, the universal life and the variable universal life policies are the most popular, at least here in the United States. 

Most of these policies, term or whole, have long underwriting process because the coverage is always provided after thorough investigation of your insurability. However, there are some especial categories of policies, which provide instant life insurance coverage. Indeed, such policies do not require you to undergo any medical test or submit any insurability certificate. Here too you find two different categories of policies; one requires you to qualify while the others promises guaranteed coverage.

The life insurance no exam policies are generally term life policies sold for a specific term. Like any other term life insurance policies, they too do not accrue any cash value. So you will not get any returns out of it unless the insured event takes place. Moreover, they are more expensive than traditional fully underwritten term life policies since the insurability risk is greater for the carriers. Although they use various methods to check it, the actual condition of your health cannot really be ascertained without the medical test.

Remember, for a life insurance no exam policy, you don’t have to undergo any medical test, but it does not really guarantee you any coverage. For instance, if you have been refused coverage within last two years, such a policy will refuse it too. The coverage is not only based on answer to some health questions, you may have to run through Medical Information Bank and Motor Vehicle Records for confirmation of different inputs supplied by you. Police records too are checked for the same purpose.

If you are ready to pay even more, you can look for graded life insurance policies. These are whole life policies and the coverage is never refused under this plan. They cost a little more, but you don’t have to answer any health related questions. Irrespective of your age or health condition, you are eligible for it as long as you are not actually living in a hospital or similar health facilities. However, the benefit under this policy is graded; which means if you die within two years of the policy purchase, your beneficiary will get back only the paid premium plus the interest; the actual benefit will be withheld. Therefore, you have to be a little cautious about it.