Life insurance can help you plan for the future and ensure your loved ones are financially secure. However, it may be challenging to qualify for an affordable life insurance policy that suits your needs if you are considered a high-risk applicant.<\/p>
Life insurance companies generally consider an applicant to be high risk if they have a shorter life expectancy. This could be because of medical or lifestyle risk factors, such as chronic health conditions or a dangerous job.<\/p>
In most cases, high-risk life insurance is no different than traditional life insurance, except that it costs more due to added health, age, and lifestyle risks. While some traditional policies can range into the millions for death benefits, high-risk policies are generally for lower amounts.<\/p>
Insurance companies have a complex rating system for each type of life insurance. It involves several factors that create a rating for an applicant, which determines how much you\u2019ll pay. High-risk candidates are assigned the lowest rating, known as a substandard table rating. This is how life insurance companies standardize their ability to add premiums to a policy based on added risk identified during underwriting.<\/p>
A high-risk life insurance applicant is someone who has health or lifestyle risks that makes them riskier for life insurance companies to insure. Unlike home and auto insurance, life insurance quotes are based on the applicant\u2019s life expectancy. <\/p>
To determine your risk, insurers will often conduct a medical examination and consider factors like your job or hobbies. Skydivers who are also smokers will typically pay more than a desk worker who spends most of their downtime reading.<\/p>
Each insurance company looks at risk differently, so shopping around is a good idea. If an insurer does view you as high-risk, that insurer may refuse to cover you or limit you to buying a guaranteed issue policy, a high-cost no-exam life insurance policy. Those that do allow you to buy a typical term life insurance policy will charge high rates.<\/p>
Your medical risk is one of the first things that insurers will look at. They\u2019ll ask for medical history and may conduct a medical examination to make sure you\u2019re in good shape and not ill. If you have any of the following conditions, you are likely considered high-risk:<\/p>
Other health conditions may not immediately make you a high-risk applicant. For instance, life insurance for diabetics can be pretty cheap, especially for policyholders with well-managed Type 2 Diabetes.<\/p>
Your lifestyle can also impact your risk. Some jobs can put you at higher risk of injury and death and many hobbies also involve danger, so insurers will ask questions about how you spend your time.<\/p>
When determining how much to charge, the largest life insurance companies categorize applicants based on their risk. The lowest-risk applicants will receive the best rates while high-risk people will pay more. Not every company uses the same classes during the underwriting process, but it\u2019s common for life insurance companies to place applicants in one of the following categories:<\/p>
Clients often ask us if they should try to lose weight before applying for insurance, or if taking blood pressure or cholesterol medications affects their premium rates. The truth is, some issues really do not have an effect on your rates at all. Every life insurance company has a different way of evaluating conditions and lifestyles.<\/p>
This might seem obvious, but one of the keys to finding affordable high-risk life insurance is working with multiple carriers. Because some insurance companies are more lenient with certain medical conditions than others, having a large pool of quotes and policies means you have a better chance of finding the lowest cost for insuring your high-risk situation.<\/p>
Generally speaking, the guidelines make it easier to qualify for permanent coverage such as universal life or whole life insurance than with a term life insurance policy. Some carriers offer credits and \u201ctable shave programs\u201d for their permanent policies that allow people who actually should qualify for substandard rates to be approved at Standard rates.<\/p>
High-risk clients are encouraged to begin their life insurance search by looking at employer-sponsored life insurance programs. Many group life plans offer \u201csimplified\u201d underwriting and will be easier to qualify for. Most ask very few disqualifying health questions\u2014some ask just one (do you smoke?), and some ask none at all.<\/p>
One downside to this option is that few company plans are portable, meaning you can\u2019t take them with you if you leave or are terminated from your job. A lot of these plans offer only a $50K death benefit or 1-2X annual income, which oftentimes isn\u2019t enough, so be sure to call us to discuss your options.<\/p>
Life insurance companies may limit your policy options if you\u2019re considered a high-risk applicant. You might be able to buy term life insurance but will pay more for a policy than an applicant with lower risk.<\/p>
Applicants with very high-risk conditions, like certain types of cancer, can have a more challenging time getting life insurance. But policies such as guaranteed-issue life insurance can help high-risk applicants get at least some coverage.<\/p>
Guaranteed-issue life insurance is a type of policy that doesn\u2019t require a medical exam. These policies function basically the same as a standard life insurance policy, but they cost significantly more than traditional life insurance and the death benefit is often lower. <\/p>
A life insurance company reviews your application during a process called underwriting when you apply. An underwriter considers your health and lifestyle risk factors to determine your underwriting class, which influences how much you pay for coverage.<\/p>
Life insurance underwriting classes help life insurance companies determine your premium or the amount you will pay for your life insurance policy. These underwriting classes are based on your health, age, and specific lifestyle considerations.<\/p>