Many consumers are wondering if no physical exam whole life insurance policies are really a good deal, with good reason. Do you know what I'm talking about when I say "no physical exam whole life"? Surely you've seen the commercials on television "for just a few cents a day" or the one about the guy throwing his "spare change" in a jar each night when he goes to bed. The question that I keep getting about these though is "are they really a good deal?"

Let's take a look at these types of whole life insurance policies.

The first thing that you'll find when you send off for more information about these is that they are not considered "regular" whole life policies, but "modified" whole life. They've been modified not necessarily to rip you off, but in order to meet a specific set of criteria. It's up to you, the consumer, to read the fine print thoroughly and make sure that the modifications of the policy that you are considering meets the needs of yourself and your family.

The first modification that I found was that the beneficiary of the policy will be paid a reduced rate if the insured person passes away from natural causes within the first two years from the date that the policy takes effect. They may pay 50%, 75% or less, depending on how long afterword that the death occured or whatever their guidelines happen to be.

You are covered immediately if you happen to die from an accident. This is known as "accidental death coverage" and there is no two year waiting period for this coverage.

Are you confused? No problem. It's totally understandable and you're not the only one so don't feel alone. Let me explain in more detail.

Let's say that you purchase one of these no physical exam whole life policies on January 1, 2007 and you pass away from natural causes on January 1, 2008. In this case your beneficiary would receive a reduced payment because of the modification that states you are not covered in the event of death from natural causes in the first two years.

Now let's look at another example.

Let's say that you purchased the policy on January 1, 2007 and were tragically killed in an auto accident two months later. In this case your beneficiary would receive 100% of the policy because you were covered immediately for accidental death.

Let's do one more example.

Let's say that you bought the policy on January 1, 2007 and passed away three years later from a heart attack. In this scenario you are covered because although you passed away from natural causes, it didn't happen until after the two year exclusion or waiting period was over.

Most of these types of no physical exam whole life insurance policies are sold in "blocks" of coverage. For example, you could by coverage in blocks from $1,000-10,000.00 each.

These blocks of coverage can become quite expensive considering that the average funeral costs between six and ten thousand dollars, at the time of this writing. It can be especially expensive for elderly couples without coverage that live on fixed incomes.

Although it may be your only option once you reach a certain age group, I highly recommend that you look at different alternatives before purchasing this type of no physical exam whole life insurance policy.