Risky Business: What You Need to Know About High-Risk Life Insurance

Key Takeaways:

• High-Risk Life Insurance: This insurance is for individuals with high-risk profiles due to health, jobs, or habits, providing a safety net at a higher cost.
• Policy Options: Various policies are available, such as guaranteed issues, simplified issues, and graded death benefit policies, to suit different risk levels.
• Policy Conversion: Certain insurers may allow conversion from high-risk to standard life insurance upon lifestyle or health improvements, leading to lower premiums.
• Importance of Comparison: Comparing policies and quotes and consulting with experienced agents or brokers is recommended for selecting the best policy.
• Long-Term Financial Planning: High-risk life insurance is a key part of long-term planning, offering financial security for your loved ones.

Life Insurance Agent: Do you participate in any high-risk activities?

Person seeking life insurance:  I’m getting ready to base jump off a 10,000-foot mountain this weekend.  Does that count?

Life Insurance Agent:  <Silence>

To be able to qualify for cheap life insurance, participating in “high-risk” activities is not going to do any favors to your checking account.

Understanding the Different High-Risk Factors

High-risk, as viewed by a life insurance company, doesn’t just look at pilots, base jumpers, skydivers, or deep-water scuba divers. Being at high risk can also mean you have high blood pressure, diabetes, sleep apnea, depression, and a host of other medical conditions.

Being a high-risk candidate basically guarantees your premiums will be much higher, but when you have beneficiaries or a spouse that needs to be taken care of no matter what happens to you, buying a life insurance policy is critical.

If you are not an ideal candidate for life insurance, it may be difficult to get approved for a policy. In some cases, you can still get approved for high-risk life insurance, depending on your situation.

If you work in a risky profession or if your health isn’t that great, you fall into a category known as impaired risk. If you find yourself in this situation, there are steps that you can take to increase your chances of getting approved for a life insurance policy.

Here are a few factors to consider about high-risk life insurance.

Careers and Health Conditions

Aside from lifestyle choices and hobbies, your career or health condition could place you in what insurers call the “impaired risk” category. Those who work in high-risk professions or have subpar health are often considered to fall under this classification.

Being placed in this category doesn’t necessarily spell doom for your prospects of acquiring a policy. Rather, it signifies the necessity for strategic planning and effort to maximize your chances of approval.

Each insurer evaluates risk differently. Hence, a condition or career deemed unacceptable by one insurer might be deemed less risky by another.

Knowing this, your best approach might involve engaging with an independent life insurance agent capable of liaising with multiple insurance companies.

High-Risk Insurance Basics

In the area of life insurance, insurance companies look at the amount of risk that comes with every policy.

They determine how much you’ll have to pay in premiums based on the level of risk that you bring to the table. Many insurance companies will simply deny a life insurance application if you are considered to be too risky.

Others will throw you into another high-risk category.

At that point, you can pay more for a high-risk policy, or you may be denied a policy. If you qualify for a high-risk life insurance policy easily, then you simply have to start paying your premiums, and the policy will be yours.

If it’s not that simple for you, you may have to jump through a few hoops (just don’t jump off any cliffs!) before you can be approved for a high-risk life insurance policy.

Shopping Around

When you find yourself lumped into a high-risk category, you might have to shop around a little bit before you can find a company that is comfortable with your type of risk.

The best way to do this is to work with an independent life insurance agent that is able to work with several different carriers. Trust me when I say, “The more, the better”.

An independent agent can also help you switch insurance companies for other products like home and auto coverage to guarantee you are getting the most affordable rates for your coverage levels. They’ll be able to get multiple life insurance quotes from several companies to make sure you are getting enough life insurance.

I’ve learned many captive agents — those are the agents that are tied to one company — have much stricter underwriting guidelines and, without the ability to shop around, either leave you stuck with a much higher rate than you should be paying or get declined and have no life insurance coverage.

Some companies may not touch people in a certain category, while others will welcome them with open arms.

This means that if you have a problem getting approved for a life insurance policy, you’ll simply have to do a little bit of research and find out which companies are comfortable with your brand of risk.

Then again, this is what an experienced independent life agent should be doing for you.

I have countless examples where even the best life insurance companies will rate individuals differently based on their conditions. Many consumers don’t realize that.

One recent example was a young female who was in good health and applied for coverage with me.

On the surface, there was no reason why she should not have been approved for preferred plus (the highest rating class possible). It turns out her mom had passed away early due to breast cancer, which made her more of a high risk with most insurance carriers. 

The keyword is “most”.

While most carriers would not give her the preferred plus rating class for breast cancer, there are a few companies that will. If you’re not working with an independent agent, this might be something you would never know.

Show That You Can Control It

If the reason that you were considered to be high-risk initially can be controlled, then you have a better chance of getting approved for a high-risk policy. If the risk controls you and is completely unpredictable, then it will be much more difficult to get you approved.

For example, if the life insurance company rejected your application because of your high cholesterol level, then you need to be able to demonstrate that you can get it under control again.

This may simply mean changing your diet and engaging in a healthier lifestyle. At that point, you can be retested by the life insurance company to see if your cholesterol has improved. (Before you retake the test, make sure to check out getting life insurance policies with no life insurance medical exam.)

If it has, then they will reconsider your application for a life insurance policy. If it has not improved, then your application will be rejected again.

At that point, you may have to wait a certain amount of time before you can reapply for another policy or get a type of plan that doesn’t require a medical exam at all.

Utilize a Trial Offer

In life insurance, there are trial offers that you can sometimes take advantage of that will allow you to qualify for a policy without having perfect health.

To participate in this type of scenario, you will work with a life insurance broker or agent who can gather your health information. They’ll ask you a series of questions and determine exactly how healthy you are.

At that point, they can send your information to many different life insurance companies at the same time and see if anyone is willing to bite on the risk.

If a company is comfortable with the risk that you present, they will send back a trial offer and a rate for you to consider. If you like the terms, then you can go ahead and fill out a formal application and attach the tentative trial offer to it.

At that point, as long as nothing changes on your end by the time the application is processed, you can be approved for the policy.

Alternatives to Traditional Life Insurance

If you’ve been denied a traditional life insurance policy due to high-risk factors, don’t lose hope. There are alternatives available that might be a better fit for your unique situation.

Guaranteed Issue Life Insurance

One option is Guaranteed Issue Life Insurance. This type of policy, as the name suggests, is guaranteed to be issued to applicants regardless of their health or risk profile.

While this might sound ideal, it’s important to understand that these policies often come with much higher premiums and lower coverage amounts.

However, if you’re unable to secure a traditional policy due to high-risk factors, this might be a viable option.

High-Risk Specialty Companies

There are some life insurance companies that specialize in high-risk cases. These companies have a better understanding of certain risk factors and are more willing to issue policies to high-risk applicants.

Working with a knowledgeable insurance agent can help you identify these companies and navigate the application process.

Group Life Insurance

Another alternative is Group Life Insurance, which is usually offered by employers as part of a benefits package. Because these policies cover large groups of people, the risk is spread out among the group, making it less significant if one person has high-risk factors.

However, the coverage amount might be lower than what you could get with a personal policy, and you generally lose the coverage if you leave the employer.

How Much Do You Really Need?

One of the realities of purchasing high-risk life insurance is that the cost will be much more. Much more depends on your exact condition. Before you start shopping around for your policy, you first need to get an idea of how much life insurance you need.

Use the calculator below to see the proper amount you should purchase.

The Bottom Line – Getting High–Risk Life Insurance

If you’re a high-risk individual, life insurance is still within your reach. You can explore options like Guaranteed Issue Life Insurance, insurance from high-risk specialty companies, or group life insurance.

Although these might involve higher premiums or lower coverage amounts, they ensure that you’re not left without a safety net. It’s also critical to engage an experienced insurance agent to guide you through this specialized terrain.

High-risk status is not a permanent label – changes in lifestyle or health improvements may enable you to secure better insurance rates in the future. Despite the challenges, remember that obtaining life insurance as a high-risk individual is not just a dream but an achievable reality.

Other High-Risk Health Issues 

• Kidney Problems
• Diabetics
• Heart Disease
• HIV
• Cardiomyopathy
• Thrombocytopenia
• Diverticulosis
• Hepatitis 
• Epilepsy
• Autism
• Obsessive Compulsive Disorder
• ADHD
• Cushings Syndrome
• Bipolar Disorder
• Lupus
• Anemia 
• Crohns Disease
• Iron Deficiency Anemia
• Eating Disorder
• Adrenal Insufficiency
• Elevated Liver Enzymes
• High Calcium
• Multiple Sclerosis
• After Stroke
• Lipid Levels Arteriosclerosis
• Athlete’s Heart
• Armed Security Guard Overseas
• Family History
• Driving Record
• Smoking Habits
• Prescription Medications