Life Insurance - Exam or no exam?

[DrDudeMD]

I'm about to hit 30 in a few weeks. I've read that life insurance can take many weeks to become active (accounting for physical exam, labs, etc). By going the no exam route, it cuts the processing time drastically.

My question is--- is it worth it to pay the extra associated with a no exam policy versus being more patient and going the exam route even if it means getting my policy after the age of 30? People keep telling me that the age of 30 is that magical cutoff when premiums go up.. Is that so? I'm looking to lock in some good rates with a 20-30 yr policy probably at 2 mill. Any thoughts/suggestions on how to best approach my policy purchase?

Thanks!

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[The White Coat Investor]

It doesn't go up dramatically. 30 is only slightly more expensive than 29. Unless there is some reason to avoid an exam, you almost surely will get a better rate by doing the exam. Besides, insurance companies consider 29 1/2 to 30 1/2 to be 30. You're probably already 30 in their book.

 

[DrDudeMD]

Thanks. I realized that as I went about my search recently.

One other question -- the difference between a captive and independent agent isn't so clear cut. The people I've gotten quotes from via term4sale are reaching out to me with emails from prudential/northwestern mutual etc. They claim to be independent agents and offer multiple policies. Is that possible, even if they seem to be affiliated with some company?

 

[Doctor4Life1769]

I have mine via Northwestern Mutual

 

[MD Financial Services Scott]

Northwestern rep will be showing Northwestern, no other reps can show that company. Be sure to look at fixed products for 10, 20, and 30 years Most situations you will be well served with fixed rates for those periods of time. As for rates, most companies don't even change their 10 year rate on what a product costs until you hit age 35 then it has about a 4% rate increase during the 30's, 5-6% in 40's, 8-10% in the 50's, 12-14% in the 60's and 15-18% in the 70's.

 

[cpants]

Term insurance is basically all the same. Get quotes from multiple companies and go with the cheapest. Getting an exam will usually save you money.

 

[RangerBob]

I agree--go with the cheapest. Life insurance is pretty unambiguous--either you're dead or your note. With disability insurance on the other hand, you typically get what you pay for.

 

[MD Financial Services Scott]

There are some differences in the term policies for sure, some have benefits you can use prior to Death...kind of nice. Some have conversions that others don't. As an example earlier in the week I had a client that has developed health issues and had bought a Prudential contract 8 years ago on a 10 year term policy, he can't medically qualify for another policy so in 2 years his premium is going to jump about 10X and then will go up every year from there. In addition that policy only had conversion for the first 5 years. His hope is that he makes it financially and does not need the coverage since it is going to get expensive but his fear is that he may not make it financially or simply that he would feel more comfortable with coverage. Cheap is great but if you ever have anything but the best scenario it might be better to spend the extra $1-$2 to have the safety net. Just the same as we all drive very safe vehicles and probably not many driving something without an airbag.....not sure if you will ever need it but nice to know it is there.