A chronic medical condition or a dangerous job will complicate your life insurance shopping process.
You won’t be able to choose any policy from any carrier. Instead, you’ll need to build your coverage carefully and select a provider well suited to your condition. You’ll likely need a high-risk life insurance policy.
People with dangerous hobbies like skydiving may also need high-risk life insurance, and applicants who use tobacco almost always need this kind of coverage.
Table of Contents:
- What is High-Risk Life Insurance?
- How It Works
- Is It Affordable?
- Do You Qualify?
- Who Needs High-Risk Life Insurance?
- How To Get the Best Rates
- Best High-Risk Life Insurance Companies
- What if You Are Declined?
- What Types of Coverage are Available?
- No Exam
- Hidden Costs
- How To Apply
What Is High-Risk Life Insurance?
High-risk life insurance works like any other kind of coverage. You buy a policy and pay the premiums. In exchange, your insurer will pay your survivors a lump sum of cash when you die.
The difference for high-risk insurance comes down to how insurers underwrite the coverage. Here’s where it gets confusing: Different insurance companies have different underwriting guidelines.
When reviewing your application, one insurer may consider your policy too risky and deny your application. Another insurer could return a more favorable decision.
Getting coverage — or finding coverage with premiums you can afford — comes down to finding the right life insurance company and policy for your specific high-risk condition.
Is High-Risk Life Insurance Affordable?
It’s important to know this: Premiums for high-risk life insurance will be higher compared to standard policies. (If an agent has told you otherwise, you should be skeptical.)
But this doesn’t mean your high-risk coverage will have to be priced out of the ballpark.
In fact, many insurers today are making high-risk coverages fit within a variety of budgets. Shopping around can lead you to the company best suited for your needs and your budget.
Sometimes captive agents will let you apply for coverage they know you won’t get. Then, when you’re denied, they direct you to more expensive, guaranteed issue insurance from the same company.
To them, a sale is a sale. Either way, their company benefits.
An independent agent has the freedom to work on your behalf. They have policies from a wide variety of providers which gives you a much better shot at finding the right coverage for your condition.
Can I Qualify For Life Insurance if I’m Considered High Risk?
Decades of denials have led high-risk applicants — understandably — to believe they’re ineligible for quality life insurance.
This isn’t true. Not only can high-risk applicants with pre-existing conditions find coverage, they can often find high-quality coverage. In fact, some of the best insurance companies offer plans designed for people who may not qualify for an off-the-shelf policy.
For example, if you are overweight, there are life insurance policies designed for you. Please don’t assume you can’t get the coverage your family would need if you died unexpectedly.
Your family deserves your best efforts to find good life insurance coverage — coverage that would help create some financial stability if you died and they lost your income.
We’re going to climb up on the soapbox here because this is important: Too many applicants give up after one or two denials. The thought of applying again and again only to face more and more denials seems too daunting. We get it. We’ve seen it unfold so many times.
And that’s why we can help. Finding the right coverage might boil down to finding the right company — the company that wants to do business with you; the company that thinks you’re a good candidate for their coverage.
Who Is A Good Candidate For High-Risk Life Insurance?
A wide variety of people fit into the high-risk category for life insurance, including:
People With Pre-Existing Health Conditions
People with a variety of chronic health conditions should consider a high-risk life insurance policy.
Some carriers now offer coverage to people with chronic health issues such as heart disease, stroke, anxiety, depression, and bipolar disorder.
From the perspective of life insurance underwriters, someone recovering from a serious illness still qualifies as high-risk. Typically, insurers enforce a waiting period — two years, for example — before considering you for standard rates.
This waiting period varies between insurance carriers and health conditions. A cancer survivor in remission for three years may not yet qualify for standard rates.
High-risk status isn’t always about health, though.
People Who Participate in High-Risk Activities
SCUBA divers, skydivers, wilderness adventurers — any kind of higher risk hobby can land you in the high risk life insurance category.
How often you enjoy your dangerous hobby will make a difference here. A once-a-year skydiver should have an easier time finding standard rates than an every-weekend skydiver.
Tell the truth on your application. Insurers investigate claims before paying your family, especially during the first two years. Omissions on your application could jeopardize your coverage.
Individuals with High Risk Occupations
Underwriters tend to worry more about specific high-risk occupations than they do about high-risk hobbies. This makes sense. A dangerous job could have you at higher risk of premature death on a full-time basis.
Private airplane pilots, loggers, commercial fishermen — these and several other professions could place your application into this category.
Quite a few people – even though they may be perfectly healthy – could find it hard to buy insurance at standard premiums because of their jobs and hobbies. High risk life insurance may be their best option.
How to Get The Best Rates for High Risk Coverage
Independent life insurance agents can offer high risk applicants two advantages:
- Knowledge About a Variety of Carriers: Just like you know the nuances of your industry, a life insurance agent knows the nuances of the life insurance business. Over the years we learn which companies look more favorably upon certain high risk applicants such as high blood pressure. We can use this knowledge to save you a lot of time and money.
- Hard Work: Old fashioned hard work still carries a lot of weight in this world. When an applicant doesn’t fit the mold for an off-the-shelf policy, an independent agent can walk the extra mile to research best companies. This is even more important now that insurance changes so quickly.
Both these advantages come down to asking the right questions and finding the right information.
Ideally, after this process, you’ll have a few different carriers to choose from so you can compare rates and policy features just like anybody else who needs life insurance coverage.
Who Are The Best High-Risk Life Insurance Companies?
Here are five of the best high-risk life insurance providers:
- Policy Options: Term and Universal
- Best For: Fibromyalgia and high cholesterol
- M. Best: A+
- Review: Banner Life Insurance Review
- Policy Options: Term, Universal and Variable
- Best For: Smokers
- M. Best: A+
- Review: Lincoln Financial Review
Mutual of Omaha
- Policy Options: Term, Universal, Whole and Indexed Universal Life
- Best For: Heart conditions, diabetics and no exam life insurance
- M. Best: A+
- Review: Mutual of Omaha Review
- Policy Options: Term, Whole, Universal, Survivorship, Variable & Child Life Insurance
- Best For: Chrons Disease
- M. Best: A+
- Review: Protective Life Insurance Review
- Policy Options: Term, Whole and Universal
- Best For: High blood pressure, diabetics and affordable no exam policies
- M. Best: A+
How Does High-Risk Life Insurance Work?
Life insurance is competitive. This competition sparks a variety of underwriting approaches because companies want to find a niche their competitors haven’t already occupied.
One company may focus on extremely healthy applicants. Health IQ, for example, wants the healthiest people to apply for their coverage. They can offer low premiums because they have a high volume of low-risk policies on their books.
Other insurers focus on higher-risk applicants — and sometimes specific kinds of high-risk applicants. These insurers take on more risk but they also charge higher premiums.
Again, volume is the key. High risk insurers encourage applicants from people with certain medical conditions by writing policies with more favorable views on these conditions.
High-risk coverage will still cost more; it’s just not intentionally priced to discourage you from buying the policy.
A Case Study in Tobacco
Consider tobacco users. Some companies avoid smokers by charging exorbitant premiums. They hope — and it usually happens — that smokers will be discouraged by the astronomical premiums and apply elsewhere.
Other insurers take the time to evaluate each individual applicant — even smokers’ applicants — to see how their lifestyles, their other habits, and their general health conditions shape up. These companies will try to cover you.
Again, smokers will still pay more than non-tobacco users, but the increase will be more reflective of your overall health and not simply an automated increase in rates designed to discourage your application.
Whatever creates your risk factor, we want you working with the company best suited to treat you like an individual and to see your “high risk” in the best light.
What If I Have Been Declined For Life Insurance?
When you get denied for life insurance, part of the blame can go back to your agent. When your agent encourages you to apply for mismatched coverage, a denial is all but certain.
Think about it: If you knew nothing about animals, you probably wouldn’t apply to be a veterinarian’s assistant. And if you did apply, you shouldn’t be surprised if the vet doesn’t hire you.
Yet agents sometimes send off your application for coverage you won’t likely get. As we said above, a few agents do this on purpose to direct you to higher cost coverage within their company.
We can help. We’ll tell you up front: There’s no guarantee you’ll get coverage at the price you want to pay, especially when it comes to high-risk diagnoses such as COPD or heart disease.
Often, you’ll have to do a little work yourself. With heart disease, for example, you’ll need to take your medications as prescribed and visit your cardiologist regularly.
Thanks to online database checks, more and more insurers can find out how well you manage your health. This can work in your favor. Or, it will work against you if you fail to follow directions and take your meds. It’s up to you.
But many times the success of your application depends on your agent. For example, a person looking for life insurance with multiple sclerosis can get declined pretty quickly if the agent doesn’t know which companies work best with the different types of MS.
We do our homework and help match you with companies that will treat your personal situation the best.
When we’ve both done our best — you as an applicant and us as agents — and we still can’t get you the coverage you need, then we’ll then start to consider other types of coverage.
These policies do not require a medical exam. You can usually be approved in less than 30 days. Despite these advantages we consider guaranteed issue insurance your last resort because you’ll pay more for less coverage.
What Type Of Coverage Should You Purchase if You’re High Risk?
High risk life insurance refers to the underwriting process and not the type of coverage you buy. As a result, you will still have the option of choosing term or permanent coverage.
Just like with any other insurance shopper, your choice of policy type should depend on your specific insurance needs.
Term Life Insurance
Term life insurance offers pure death benefit protection with no cash value or savings component. Term is basic — “plain vanilla” — life insurance coverage. It’s ideal for protecting your mortgage or other debts.
Because it’s temporary and doesn’t accrue cash value, term life costs less than permanent life. Usually, your term policy will last 10 to 20 years. Depending on your age, you could qualify for 30 years of term coverage.
When your term ends, so does your coverage. If you still need coverage at that point, you can re-apply at a higher rate or opt for a different kind of coverage.
Permanent Life Insurance
Permanent life insurance offers a death benefit — and it builds its own cash value, kind of like a savings account. Later in life you could borrow against this cash value or surrender your policy and cash out its value.
Because of its permanence and its ability to become a financial asset, permanent life insurance costs a lot more than term life.
Permanent coverage is especially attractive because its value accumulates on a tax-deferred basis. But remember: If you borrowed against your policy’s cash value later in life, you’d be reducing the death benefit your survivors could claim.
Universal Life Insurance
You may like the idea of a universal life insurance policy. These policies create a hybrid of sorts: They combine the lower cost of term with the savings component of a permanent policy.
Universal policies are remarkably flexible compared to a traditional whole life insurance policy. Within certain limits you can change when and how much you pay in premiums.
Guaranteed Universal Life Insurance
Guaranteed universal life insurance creates a nice in-between. You can get the permanence of whole life while paying premiums that more closely resemble affordable term rates.
Normally, guaranteed universal policies do not accumulate cash value. But they can last the rest of your life.
No Exam Life Insurance for High-Risk Applicants
If you’ve been denied life insurance coverage because of your health, you may still be able to find the kind of coverage your family needs.
But even if we can’t find exactly what you need, you’re not out of options. You can still consider no-exam insurance which has disadvantages as well as advantages.
Advantages Of No Exam Life Insurance
The biggest advantage of no-exam coverage is obvious: You can get covered without taking a medical exam.
If you need life insurance coverage quickly, a no medical exam is probably going to be your best bet.
You can finalize some no-exam coverage within 24 to 48 hours.
Disadvantages of No Exam Life Insurance
No-exam coverage, though convenient, comes with its own unique costs.
Without the medical exam, your insurance company has limited information about your health. Limited information makes you a riskier applicant. One thing you can depend on with life insurance: higher risk equals higher premiums.
Along with the higher cost you’ll also face other limitations. Your coverage amount will be capped. Most companies offer no more than $250,000 in no-exam coverage. For many families this isn’t enough to cover all debts and plan for the future.
Some no-exam shoppers try to buy two policies. There’s no rule against having multiple policies, but your cost will, of course, be higher.
These limitations make getting a traditional policy, despite its medical exam, worthwhile for most applicants.
Controlling the Hidden Costs of High-Risk Life
Let’s review: Coverage costs more when you need high-risk life insurance. Choosing the best insurer lets you access coverage more easily and affordably.
This isn’t the end of the story. You can also help your case — and control costs — by taking control of your shopping process. The “hidden costs” of life insurance are built into the coverage itself.
All life insurance shoppers should follow these steps, but high-risk shoppers should be even more careful because they’re already paying more for coverage.
You can control costs by:
- Getting a Simpler Policy: Term life costs less, almost always, than permanent coverage. Unless you have a specific need for a variable or universal policy, buy a basic term life policy.
- Getting the Right Amount of Coverage: Too much coverage will cost more than you need to pay. Get a 20-year term unless you really need 30 years. Don’t overdo the coverage amount.
- Taking the Medical Exam (If You’re Healthy Overall): Shoppers love no-exam coverage, but you’ll pay more than you need to for no-exam when you’re healthy. The exam shares your overall health and wellness with your insurance company; you’ll benefit by paying lower premiums.
- Controlling Your Other RIsk Factors: If your job puts you into a high-risk category, try not to add a second high risk such as tobacco use, obesity, or high blood pressure.
- Managing Your Condition: Shoppers with chronic medical conditions can help themselves and their premiums by managing the condition. Following up with your doctor and staying on top of your medicine will prove you’re less risky than a more volatile patient.
How to Apply for a High Risk Policy
When you’re ready to take the next step and apply for your high risk life insurance plan, we’d like to help.
We work directly with many of the top-rated life insurance companies in the marketplace today – and we will direct you to the companies most likely to approve your coverage.
We can also help you with more specific needs such as the best life insurance coverage for veterans or finding the best company to work with if you use tobacco.
In addition, we can help you compare different policy benefits, as well as premium quotes – all from your home so you don’t have to meet an insurance agent in person.
Fill out our form on this page when you’re ready to get started finding your best life insurance options. If you have questions or concerns along the way, we’ve got your back.
Even if you’ve been rejected for insurance, you can still find the protection your family needs.