High-Risk Life Insurance

If you’ve ever gone through the life insurance underwriting process and had to answer numerous questions about your health, lifestyle, and occupation only to end up with a rate that was much higher than your original quote, you’ve likely been considered high-risk by the underwriter.

High-risk life insurance is a type of policy designed for individuals who may have a higher risk of death due to various factors such as health conditions, occupational hazards, lifestyle factors, or hobbies and activities. High-risk life insurance policies offer coverage to individuals who may have been declined coverage by traditional life insurance providers. These policies typically have higher premiums, more limitations, and may require a medical exam.

Easy Article Navigation

• High-Risk Occupations

• High-Risk Habits

• High-Risk Hobbies

• High-Risk Health Conditions

• How Risk Affects Life Insurance Rates

• Finding the Best High-Risk Life Insurance Quotes

• Frequently Asked Questions

The need for high-risk life insurance varies from person to person. Generally, those who have dependents or significant debts may consider high-risk life insurance. It is important to discuss the need for high-risk life insurance with a qualified insurance agent to determine if it is a necessary investment. When applying for high-risk life insurance, it’s essential to be transparent and truthful about your health and lifestyle. It’s also important to compare policies and coverage options from multiple providers to find the best policy that fits your needs and budget.

What is High-Risk Life Insurance?

A High-Risk Life Insurance policy can be any life insurance product that is rated lower than the “standard” health classification.

The high-risk label used by insurers can be for multiple underwriting reasons, such as the applicant’s health history, lifestyle, occupation, high-risk hobbies, or even traveling to certain foreign countries.

Life Insurance for People with High-Risk Occupations

Although many insurance shoppers generally understand the difference between a high-risk occupation and a standard-risk occupation, most assume that any job associated with a risk of injury or death will be considered high-risk.

How life insurance companies determine high-risk occupations is not subjective at all. Remember, life insurance actuaries (the people who calculate the rates) only consider mortality rates. There is nothing subjective about it; it’s math, plain and simple.

Fortunately for life insurance shoppers who work in a high-risk industry, the competition among insurance companies has motivated some companies to specialize in high-risk insurance for occupations like pilots, first responders, and police officers.

Moreover, for every life insurance company willing to offer high-risk life insurance, there is an independent insurance professional who also specializes in occupational high-risk clients.

Life Insurance for People with High-Risk Habits

Generally, people who develop high-risk habits also live high-risk lifestyles. In this category, insurers are typically referring to applicants who smoke cigarettes and cigars, use other tobacco products, use non-prescribed drugs and pharmaceuticals, and drink more than what the insurer deems as casual.

Typically, high-risk habits will result in considerably higher life insurance rates, and excessive high-risk habits will likely result in the applicant being declined insurance coverage.

Although there are no life insurance companies that advertise life insurance coverage for applicants with high-risk habits, there are a handful of companies that will offer standard rates for smokers who consume a lower amount of tobacco (e.g., one celebratory cigar a month) than the average smoker consumes.

Life Insurance for People with High-Risk Hobbies

When we consider high-risk hobbies, most people think of car or motorcycle racing, scuba diving, or the ultimate thrill – skydiving.

There is a large section of the public that may have mundane jobs during the day and then seek out thrills over the weekend. Some of these folks compete in extreme sports, go mountain climbing, or compete in survivor contests.

Additionally, a large number of people travel to various countries to enjoy their high-risk hobbies, which many insurance companies frown on. Any of these high-risk hobbies can typically result in a rated policy unless the applicant finds an insurance carrier that specializes in life insurance for people with high-risk hobbies.

Health Conditions that are Considered High-Risk

When an applicant is filling out an application for life insurance, there will be several health conditions that the insurance company will focus on because of the mortality rate associated with each condition.

If an applicant has a condition that’s not mentioned on the application, it’s safe to assume that the insurance company has not designated it as a high-risk health condition.

The following are the health conditions that every underwriter will be concerned about and will ask for detailed information:

Cancer – Anytime you answer yes to the “cancer” question (not skin cancer), bells will go off with the underwriter. He or she is going to require a lot of information about your cancer and its treatment, which will typically result in a supplemental questionnaire regarding your condition.

Depending on how long a company looks back (5 years, 10 years, 20 years), buying life insurance after a cancer diagnosis can be overcome using the right broker that represents many insurance companies.

ALS, or Lou Gehrig’s Disease another medical condition that is considered high-risk and generally causes major concerns for underwriters. The disease is a progressive neurodegenerative disease that affects the nerve cells in the brain and spinal cord.

Since the mortality rate is so high and a cure is not on the horizon, applicants will need to purchase guaranteed issue life insurance with considerably higher rates and a 2-year waiting period before the insurance company would pay the full death benefit for death due to natural causes.

Congestive Heart Failure – If you suffer from congestive heart failure, it means your heart’s pumping action is insufficient to regulate your blood flow throughout your body properly. This is generally the result of fluid building up around your heart, causing it to pump inefficiently.

Congestive heart failure (CHF) is a symptom of other underlying health conditions. Your underwriter will require information on the underlying health condition and how that condition is being managed.

Since congestive heart failure typically results in a coverage decline, most independent brokers will recommend a graded benefit or guaranteed issue policy from a company with very liberal underwriting standards.

Chronic Obstructive Coronary Disease (COPD) is the result of chronic bronchitis, emphysema, or both. COPD is a progressive disease affecting the lungs’ ability to discard the carbon dioxide when you breathe, which results in air being trapped in your lungs when you exhale.

COPD is a chronic disease without a cure that becomes more severe over time. Unless properly managed, COPD will generally lead to more severe complications like heart problems, respiratory infections, and lung cancer.

Since the mortality rate for COPD is very high, companies that offer coverage will apply extremely high table ratings or decline to offer coverage at all. In most cases, applicants with COPD must consider a guaranteed issue (guaranteed acceptance) life insurance with much higher rates, a 2-year waiting period, and a coverage limit of $25,000 to $30,000, depending on your age.

Dementia – Dementia and Alzheimer’s are considered prevalent across the US, with over 50 million people under treatment. It severely affects the brain’s cognitive ability and generally results in total disability.

Although research in dementia patients has resulted in some treatments, there is currently no cure, and the mortality rate is too high for life insurers to offer traditional life insurance coverage.

Applicants having been diagnosed with Dementia or Alzheimer’s can get life insurance coverage using a guaranteed issue policy since medical conditions are not taken into consideration during the underwriting process.

HIV/AIDS – Applicants who have tested positive for HIV or have been diagnosed with AIDS generally cannot purchase a traditional life insurance policy. Even though innovative treatments have been created to help with the management of HIV/AIDS, most insurance companies consider the risk and mortality rate too high and are unwilling to offer traditional coverage.

Here again, guaranteed issue life insurance is the alternative. Since the applicant’s medical history will not be considered to have coverage issued, virtually any living person who is in the company’s eligible age group can purchase life insurance with higher rates, and a waiting period before the full death will be paid for death from natural causes.

The policy will, however, pay the full death benefit for a death resulting from an accident.

Dialysis – Traditionally, an applicant who is getting dialysis treatments is in either end-stage-kidney failure or end-stage renal failure. Certainly, the keywords here are “end-stage.”

If an applicant is on dialysis, generally, the only way of coming off dialysis is through a kidney transplant. Regretfully, no life insurance company is going to issue a traditional term, universal life, or whole life to a dialysis patient.

The good news is you can get a guaranteed issue life insurance policy as long as you qualify for the eligible age group, which for most insurers is 55 – 85 years old. In exchange for accepting an unknown health risk, the insurance company will charge higher rates, require a 2-year waiting period, and generally limit the coverage amount to $25,000 – $30,000.

Heart Attack – An applicant shopping for life insurance after having a heart attack can purchase traditional life insurance. Since heart attacks are fairly common, insurance companies have an enormous amount of data that they can compare with any applicant.

Typically, the most important question on the application starts with the word “when.” Even if an applicant has had multiple heart attacks, the insurance company will focus on the most recent one, and it must have taken place more than twelve months ago.

If the heart event occurred within the last 12 months, a guaranteed issue life insurance policy will be your only option as long as you are in the eligible age group.

Stroke – Similar to heart attack underwriting, an applicant who has had a stroke can qualify for traditional life insurance as long as the event is more than 12 months in the past and does not cause permanent paralysis.

Many stroke patients completely recover from a stroke with no continuing issues, and as such, most life insurance companies are willing to offer first-day coverage life insurance.

If, however, the applicant’s stroke was within the last twelve months or if permanent paralysis is a result, the only option would be a no-exam guaranteed issue life insurance policy.

How Risk Affects Life Insurance Rates

The risk you present to a life insurance company is made up of various underwriting aspects, of which your current health and health history are primary factors.

Life insurance companies have established what is known as “standard” rates, which are modified by the risk you present to the underwriter. Using the data they receive from the application, medical exam (if required), and Medical Information Bureau, the insurance company will assign a rate class and then calculate your rates based on that classification.

If you present as a better-than-average risk, your rates will be lower than the standard rate class. Alternatively, if you present as an above-average risk, your rates will be higher than the standard rate class.

Although not every company operates the same, the best rate class is usually Preferred Plus (or a similar term), and the worst class is Table Rated. All high-risk life insurance applicants are typically Table Rated.

High-Risk Life Insurance vs Traditional Life Insurance

Coverage and benefits: Like traditional life insurance, high-risk life insurance policies typically offer death benefits to the policyholder’s beneficiaries if the insured dies during the policy term. These benefits can range from a few thousand dollars to millions of dollars, depending on the policyholder’s needs and coverage amount. Some high-risk life insurance policies may also offer additional benefits such as accidental death coverage, disability coverage, or critical illness coverage.

Premiums and fees: High-risk life insurance policies typically have higher premiums and fees compared to traditional policies. Insurance providers may charge higher premiums to individuals who are considered high-risk due to their health, occupation, lifestyle, or hobbies.

Exclusions and limitations: High-risk life insurance may have exclusions and limitations that traditional policies do not have. For example, some policies may not cover deaths related to specific illnesses or injuries, while others may not cover deaths related to high-risk activities such as skydiving or rock climbing.

Policy riders and additional coverage options: High-risk life insurance policies may offer additional coverage options or policy riders that can enhance the policyholder’s coverage. For example, policy riders may include accidental death coverage, critical illness coverage, or long-term care coverage. These riders can be added to the policy for an additional fee.

Finding the Best High-Risk Life Insurance Quotes

If you happen to be considered high-risk because of your medical history, lifestyle, or occupation, your first point of contact should be an independent insurance brokerage that embraces high-risk customers rather than trying to send them elsewhere because of the work involved with getting a policy issued.

High-Risk Term Life Insurance

At LifeInsure.com, we have three go-to insurance carriers that we use for high-risk individuals who prefer term life insurance with the lowest rates possible.

Prudential Life is a premier insurance carrier that we recommend because of its flexible underwriting and competitive rates.

Prudential is one of the most well-known life insurance companies in the U.S. and has excellent ratings that demonstrate they will be there when you need them.

Prudential currently offers three term insurance products, all of which are competitively priced and come with liberal underwriting guidelines.

Banner Life a subsidiary of Legal & General Financial, is another go-to company for high-risk applicants because they offer term insurance with liberal underwriting guidelines and, in some cases, no medical exam requirement.

The company has been offering superior insurance products since the early 80s and is a subsidiary company of Legal & General Group, a very large life insurance holding company.

Rated A+ (Superior) by A.M. Best, Banner Life continues to offer premium products at competitive prices.

Corebridge, formerly AIG,l is known as the working man’s insurance company because of the product selection and competitive rates.

With A or higher ratings across the national rating services, American General demonstrates that they are in for the long haul and will be there when you need them.

High-Risk Guaranteed Issue Life Insurance

Guaranteed Issue Life Insurance policies are designed for applicants who cannot medically qualify for standard (traditional) life insurance.

Simply put, the insurance company agrees to accept an unknown health risk in exchange for a higher premium, a waiting period for death from natural causes, and a reduced death benefit.

The waiting period in a guaranteed issue policy is generally a two-year period in which, if death is the result of natural causes, instead of the full death benefit, the beneficiary would receive 110% of all premiums paid to the insurance company (depending on the company you select).

If the cause of death during the first two years is the result of a covered accident, the waiting period does not apply, and the full death benefit would be paid to the beneficiary.

For example, Fred Jones has a $25,000 Guaranteed Issue Life Insurance policy that he purchased because he was unable to medically qualify for traditional life insurance.

Fred’s policy was issued on March 1, 2019, with a monthly premium of $86.50. On April 15, 2020 (13 months later), Fred died after being hospitalized with COVID–19.

Instead of Fred’s beneficiary receiving the $25,000 death benefit, the insurance company paid out $1,236.95 (13 payments of $86.50 plus 10%)

Coverage Amounts for Guaranteed Issue High-Risk Life Insurance Policies

When a life insurance company agrees to accept an unknown health risk, it will mitigate the risk by limiting the amount of life insurance that the high-risk applicant can buy.

These low face amount insurance policies are referred to as final expense insurance, funeral insurance, or burial insurance policy since that is the primary reason for the insurance purchase.

Although there are a handful of insurance companies that offer guaranteed issue life insurance, the typical amount of coverage available is $5,000 to $30,000.

If you elect to purchase guaranteed issue life insurance, it will be a whole life insurance policy, which means it comes with the guarantees of traditional whole life insurance.

• Guaranteed coverage for life as long as the premiums are paid.
• The monthly premium cannot be increased by the company for any reason.
• The policy will build cash value over time that can be accessed using policy loans, withdrawals, or surrender for cash.

How to Get a High-Risk Life Insurance Quote

The best and quickest method to get a high-risk life insurance quote is to contact an independent life insurance broker that represents many of the insurers who offer high-risk life insurance policies.

Your broker should be your number one resource for discovering which life insurance product would best meet your needs.

When you choose an experienced and reputable insurance broker like LifeInsure.com, you will have an insurance professional who acts as your advocate and assists you with navigating the high-risk life insurance marketplace.

Your advocate will represent you, not the company, through the shopping, underwriting, and purchasing process to make certain that your insurance policy will best meet your insurance needs and budget.

For more information about high-risk life insurance and to see which insurance type is the best fit for you, call the insurance professionals at LifeInsure.com at (866) 868-0099 during normal business hours or contact us through our website.]