What is guaranteed cover life insurance?
[social_share]Guaranteed cover life insurance will cover an applicant without a medical check. Although these life insurance policies may seem like a good idea, they tend to be more expensive than life insurance requiring a medical examination, even though they may save the fee for the doctor’s time.
The reason life insurance providers generally insist upon medical exams is to ascertain the level of risk within the coverage before writing the policy. Without a medical exam, the insurance providers have a lot less information to go on, and will have to rely on the application information regarding age and past health. This self-reporting can be far less accurate, and therefore a far worse indicator of health and life expectancy, than a medical exam.
So life insurance providers tend to charge higher premiums for guaranteed cover life insurance, but they hide this beneath different policies. The standard life insurance policy will insist on a medical examination and carry a lower rate, but will refuse cover to any applicant who doesn’t undergo an exam when asked. The guaranteed cover life insurance will cover without the exam, but charge a higher premium. As the products are separate, the price difference isn’t always obvious.
This difference in price doesn’t always extend to health insurance, especially not for younger people with a good health record. Because the chances are relatively low of younger people having serious health issues that have not yet been diagnosed, standard health insurance can be offered without any examination. This is particularly the case over shorter terms, when the policy holder will still be young at the end of the term rather than only at the beginning.
Company-provided life insurance also doesn’t always require a medical exam, because the group generally has reasonably accurate life expectancy records already. Besides, if a person is still working, they usually tend to be in fairly good health.
