Is no-exam life insurance worth it? Here's what you should know

Most life insurance policies require you to get checked out by a medical professional so your provider can determine what sort of risk you post.

But if you have a preexisting medical condition you're worried will disqualify you — or you just don't have the time for a medical exam — some policies don't require a medical exam.

Several of CNBC Select's picks for best life insurance offer no-exam coverage, including Mutual of Omaha and State Farm.

Some no-exam policies still require you to answer questions about your health status, but not all do. In either case, you'll likely pay higher premiums and receive smaller death benefits.

Medical exams are used in underwriting, the process used by insurance companies to decide how much to charge you in premiums based on your risk profile. These physicals usually involve measuring your height, weight and blood pressure, and may require blood and urine tests to check out your cholesterol levels and other health information. If the exam finds you in relatively good health, your provider will see you as being at less risk of dying and your premiums will reflect that.

Without undergoing a medical exam, you're depriving the company of information it would use to determine its pricing.

"They're going to go ahead and assume the worst, they're going to assume that you want to hold some information back from them," says Michael Giusti, a senior writer at Insurancequotes.com. "They're going to price the policy higher."

There are several types of no-exam life insurance you'll come across as you start shopping for coverage. Some of the types you'll find include:

• Group life insurance: Your employer may offer life insurance coverage, generally in small amounts equaling a multiple of your salary. However, you may be able to purchase additional coverage through this policy. It will generally end if you leave your job.
• Simplified issue life insurance: Instead of submitting to an exam, you need to answer questions about your health to qualify.
• Guaranteed issue life insurance: No medical information is required, and anyone can be approved. However, these policies tend to provide a small level of coverage.
• Accelerated underwriting life insurance: A type of life insurance that uses third-party data on your health and habits, like prescription medication history and driving records, in place of a medical exam.

If you have a preexisting condition that could disqualify you from being approved by an insurer, you stand the most to gain from this type of insurance. While the no-exam option will likely offer a smaller death benefit, it's certainly better than no payout at all.

No-exam insurance can also appeal to people who feel a medical exam isn't worth the disruption to their routines. These checkups usually take less than an hour, though, and some medical professionals will even come to your house,

"Time does have value, and maybe you just don't want to take the time to do the evaluation," Giusti says. In some cases, you might have to skip the gym or even fast before an insurance physical.

Finally, you might see the value in no-exam life insurance if you want to keep your medical history private.

"Maybe you have high blood pressure or cholesterol," Giusti says. "You might have some reason you don't want to talk about it, so you're willing to pay that higher rate."

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every insurance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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