Medical Examination (Insurance)
A health assessment required by insurance companies to evaluate an applicant's medical condition and risk level before issuing life, health, or disability insurance. The examination typically includes basic measurements, blood tests, urine tests, and questions about medical history to determine appropriate coverage and pricing.
Example
“Before approving Lisa's $500,000 life insurance policy, the company required a medical examination that included blood work, an EKG, and a review of her prescription medications.”
Memory Tip
Remember 'Medical Exam = Money Evaluation Decision' - the insurer examines your health to decide on coverage and cost.
Why It Matters
Medical examinations help insurance companies accurately assess risk and price policies fairly, which keeps overall insurance costs reasonable for everyone. They also protect against fraud and ensure that individuals with similar health profiles pay similar premiums.
Common Misconception
Many applicants worry that any health issue discovered during the medical exam will automatically disqualify them from coverage, but insurers often still provide coverage with adjusted rates or terms. The exam is more about accurate pricing than denial, and many conditions are still insurable.
In Practice
A 45-year-old applying for $750,000 in life insurance undergoes a medical exam costing the insurer $300. The exam reveals well-controlled diabetes, resulting in a 25% premium increase from $2,400 to $3,000 annually. Without the exam, the insurer might have charged standard rates initially but faced much higher claims costs, ultimately raising everyone's premiums.
Etymology
Combines 'medical' from Latin 'medicus' meaning physician, with 'examination' from Latin 'examinare' meaning to weigh or test, reflecting the systematic health assessment process.
Common Misspellings
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Related Terms
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