In the legal parlance, a life insurance policy is defined as the equitable transfer of risk (of a loss) from one entity to another, in exchange for a payment. In other words, it is a form of risk management bought to cover certain risk such as the death of the insured or some critical illness. Under this scheme, certain amount known as the premium is paid to the insurer at regular interval and in return, the insurer promises to pay certain amount known as benefit on the occurrence of the insured event.

However, certain policies also provide capital building opportunity to the policyholder and such policies are known as life assurance policies. In fact, a true life insurance policy does not provide anything other than death benefit and if the death does not take place while the policy is still valid, no return can be claimed. However, the assurance policies return money because of the cash value it has accrued. May be this is the reason why such policies are called assurance policies instead of life insurance.

However, all these differences are rather technical. In general, we refer to all types of policies only as life insurance policies. These policies are broadly divided into two distinct categories:

1. Temporary Term Life Policies – These are pure life insurance policies, which promise a handsome return at a very reasonable cost. If you go through life insurance quote for different types of policies, you will certainly find that they are the cheapest of all. However, these policies are valid only for a fixed term and do not offer any return unless the insured dies within that term.

2. Permanent Life Insurance Policies – These policies are valid for the life of the policy holder. So they provide benefits whenever the insured dies. Moreover, they accumulate a cash value by using part of the premium you pay. Consequently, they can be cashed out after stipulated years. However, because a part of the premium is used to grow the cash value, they are always overpriced.

In fact, these permanent policies are actually the life assurance policies that have been mentioned earlier. You can choose from various categories of these policies depending upon the mode of investment and amount of return. Among all, the whole life, the universal life and the variable universal life policies are the most popular, at least here in the United States.

Most of these policies, term or whole, have long underwriting process because the coverage is always provided after thorough investigation of your insurability. However, certain special categories of policies provide instant life insurance coverage too. Such policies do not require you to undergo any medical test or submit any insurability certificate. Here too you find two different categories of policies; one requires you to qualify while the other promises guaranteed coverage.

The life insurance no exam policies are usually term life policy sold for a specific term. Just as any other term life insurance policies, they do not accrue any cash value and so you get no return out of it unless the insured event takes place. However, they are more expensive than traditional fully underwritten term life policies simply because the insurability risk is greater for the carriers. Although they use various methods to check it, the actual condition of your health cannot really be ascertained without the medical test.

A life insurance no exam policy exempts you from taking any medical test, but it does not really guarantee you any coverage. For example, if you have been refused coverage within last two years, such a policy will refuse it too. The coverage is not only based on answer to some health related questions, but the underwriters also make you run through Medical Information Bank and Motor Vehicle Records for confirmation of different inputs supplied by you. Police records too are checked for the same purpose.

If you are ready to pay even more, you can look for graded life insurance policies. These are whole life policies and the coverage is never refused under this plan. They cost a little more, but you don’t have to answer any health related questions. Irrespective of your age or health condition, you are eligible for it as long as you are not actually living in a hospital or similar health facilities. However, the benefit under this policy is graded; which means if you die within two years of the policy purchase, your beneficiary will get back only the paid premium plus the interest; the actual benefit will be withheld. Therefore, you have to be a little cautious about it.

Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on quotes life insurance and life insurance no medical, visit his site today.