There are three basic types of no medical exam life insurance in Canada; guaranteed issue, simplified issue, and a slightly more advanced simplified issue.
Guaranteed Issue life insurance – A number of companies offer life insurance directly to consumers that have no qualifying questions. Premiums are typically higher than other policies and are limited to accidental death only in the first two years. And the amount of insurance you can buy is limited to smaller amounts like $10,000. BMO (formerly AIG) is probably the most well known of these companies as they regularly ran ads as AIG,and continue to run ads on TV now that they’ve been taken over by Bank of Montreal (BMO). The type of life insurance offered is a variation of whole life insurance, so it has level premiums for life.
Simplified Issue life insurance – These products are available through a life insurance broker. Companies that offer a product like this include Industrial Alliance, Manulife, Wawanesa, and one or two others. Simplified issue insurance typically has about 5 very general questions (i.e. are you capable of carrying out the basic activities of life such as getting up,walking,bathing and feeding yourself.). If you can answer all of these few basic questions ‘no’, then you qualify for coverage. Coverage again has higher premiums than regular life insurance, is limited to accidental death only in the first two years, and typically are available only in smaller face amounts.
No medical exam life insurance – CPP and Industrial Alliance both offer a more comprehensive no medical exam life insurance policy. These policies require no physical exam, but do require that you answer a more comprehensive set of medical questions (i.e. have you had cancer in the last 5 years). If you are able to answer this extended set of questions, then you qualify for the coverage. These policies are typically also limited to accidental death only in the first two years and have higher premiums than a regular fully underwritten insurance policy. And these policies are available through life insurance brokers.
In certain circumstances, these no medical exam life insurance policies can have the two year limitation removed (basically by qualifying via answering a few more questions) as well as having higher face amounts available – sometimes as high as $100,000.
In addition, CPP has a series of term life insurance policies available. These polices are not whole life insurance but instead are intended for use when insurance is only needed for a limited time. Part of the benefit of these policies is that premiums for term insurance are lower than for whole life insurance, at least over the initial years of the policy. If you’ve been declined for a condition that’s only temporary (i.e. travel to foreign countries, or recent surgery, etc) then these policies can be an inexpensive way to fill the gap until enough time passes for you to qualify for a fully underwritten policy.
Summary: No medical exam life insurance normally has higher premiums than a fully underwritten plans, though if you expect to be rated the premiums can be comparable. No medical exam life insurance will be limited to smaller face amounts, and in most cases will only provide a death benefit in the first two years if death is accidental (otherwise, no death benefit is payable in the first two years).