What is 'no questions asked' life insurance and should I buy it?
A "no questions asked" life insurance policy is also known as guaranteed life insurance, as anybody
who can afford to take out such a policy will be eligible, regardless of their age, medical history and
occupation. These types of policy generally have a lower Pay out and higher monthly premiums than an ordinary
life insurance policy but may represent a good choice for people in risky occupations with low personal
savings who wish to ensure that their dependents are financially secure in the event of their death.
It is worth noting, however, that although no questions are asked at the outset, Pay outs will only be awarded
should the insured die as a result of a condition or event that is covered by the policy. For example, the
nominated beneficiary of someone who is chronically depressed and suffering from mental health issues who
chooses this policy on the basis that they do not have to answer medical questions will not be eligible for a
pay out if the cause of their death is determined to be suicide as this is an exclusion across many life
insurance policies.
For someone who works in a low-risk occupation, has no or reasonably few existing medical issues and is under
50 years old, a standard policy is likely to provide greater protection at a significantly lower premium, so
it is always worth comparing the level of cover and the monthly price of a variety of policies before
selecting a guaranteed life insurance policy simply to avoid the need to answer medical questions at the
outset.
If you are over 50 years old, you become eligible for an over-50s life insurance policy which provides whole
of life cover at a fixed monthly cost, again without the need for a medical examination. This
operates in a similar way to a guaranteed life insurance policy so it would be sensible to compare both
options in order to select the one that offers best value for money and the right level of Pay out for your
personal circumstances.
What is the application process for life insurance and what information do I need to give?
The application process for taking out a life insurance policy is simple. You need to choose the type of
policy best suited to you. Do you want a single or joint policy, and do you need whole of life insurance that
guarantees a Pay out on your death, regardless as to when that happens. Alternatively, do you need financial
certainty for a defined term - for example, while you are paying off a mortgage or while you have dependent
children at home? If you choose a term life insurance policy, you will need to decide whether you want a level
term policy where the Pay out remains the same for the whole of the policy, or a decreasing term where the
Pay out amount reduces annually in accordance with a reduction in outstanding mortgage payments or correlating
to a reduced requirement to pay for childcare and other necessities.
Once you have selected the term of your policy, you need to decide the Pay out amount that you would require
from the policy. In most cases, this is calculated based on your outstanding debts and financial commitments
and potentially includes a buffer based on your salary for a predetermined period to ensure that your
beneficiaries would be able to maintain their lifestyle should you no longer be there to provide for them.
This is a vital step of the application process as setting the figure too high could result in unaffordable
monthly premiums whilst setting it too low could leave your loved ones in financial difficulty in the event of
your death.
You will need to answer a number of questions about your health, occupation and lifestyle when taking out a
life insurance policy, unless you have opted for a guaranteed life insurance policy. These will include
whether you smoke, drink alcohol or take recreational drugs, have any pre-existing medical conditions, your
height and weight, hobbies and fitness level and your income and outgoings, including mortgage and debt
repayments. The answers to these questions will allow the insurance provider to determine the level of risk
that you pose to them and will aid them in determining the level of cover that they can offer you, and the
price of your monthly premiums to provide that cover.
Once you and the insurer are happy that all information provided is accurate and that the monthly premiums
are affordable, you will be able to take out the policy, which will only end when cancelled by you or in the
event of your death.
