Mike’s Life Insurance Advice

Dear Thom,

Want to hear something pretty amazing? Your wife can apply for six figures of affordable term life insurance coverage online, get approved, and not even have to have a physical. And, listen to this, some companies that offer offer cheap life insurance without a physical will issue her a policy for as little as ten dollars per month. And, if you’re young, that could be for three hundred thousand dollars in coverage.

Although term life insurance has been the province of young people it recently has been made available to older people as well.

The good news is that online life insurance companies now offer term life insurance to people between eighteen and sixty years of age. The bad news is that the older you are the less coverage they’ll offer you.

This trend started a few years ago when an insurance company offered $150,000 of life insurance on the Internet. People jumped on it like white on rice. In no time at all, actuaries from competing companies started to crunch numbers, asking themselves, “How much coverage can we offer at a really low price and still make a nice profit?”

An avalanche of companies got involved because it turned out that if your health is good there’s very little risk involved in offering you a term life insurance policy. As a matter of fact, it’s an extremely profitable business plan.

They took it a step further. Because your health is good, the insurance companies felt they could make even bigger profits if they didn’t have to pay a medical practitioner and make you go to a doctor, nurse, or paramedic for an examination.

Uh-oh, I hear some wheels turning, Thom. Since your health is less than perfect, maybe you’re thinking if you don’t mention your past problems you can get the coverage you want. You rascal!

Forget about it. It just won’t work. You have to mention your situation because if you don’t your policy can end up being worthless. If something happens to you your wife could end up getting nothing.

If you read the fine print on these policies and you’ll see that there’s an incontestability clause in the contracts. It says that if you didn’t disclose pertinent information on your application that would normally cause them to reject your application the insurance carrier can withdraw your policy within a specific time frame. Although the amount of time varies from company to company, it’s usually around one or two years.

Since you’re looking for additional insurance for your family, why not have your wife look at what term life insurance without a physical can offer? For yourself, I’d suggest that you speak to your insurance agent and ask for their recommendation.

Mike