This is a standard requirement for most life insurance policies.
Usually, if you are requesting more than $50,000 of life insurance, or you are over a certain age (eg. over 30 or 35) then you would be required to take an exam.
The reason for the physical exam is to verify your health, verify your answers to the health questions asked on the application for coverage, to get your specific information of the name of your doctors and any prescriptions you take, and to get a sample of your urine and/or blood for testing by a medical laboratory.
The results of your physical, and the results of your labs tests, help the insurance company underwrite (analyze the risk presented by insuring you for life insurance) your application for coverage.
The insurance company uses the information from your medical exam to help determine if they should insure you, how much coverage they should offer you, and what rate per $1,000 of life insurance to charge you.
After the exam, and review of your test results, the insurance company may choose to insure at the quoted price, increase your premium, decrease the amount of life insurance offered, or decline you for coverage.
In addition, there are life insurance plans available with no physical exma required. There's even guaranteed issue life insurance for seniors with health problems.
Learn more about life insurance with no physical exam required.