Tips to Finding High Risk Life Insurance
The goal of life insurance companies is to collect more premiums that the amount they pay out. Therefore, most life insurance companies try and stay away from high-risk customers. That makes finding high-risk life insurance extremely difficult. In order to keep their profits in the green, life insurance companies have a formula for deciding who gets life insurance. Medical exams are normally required. If this exam places a consumer into the high-risk category, they may be rejected. The best case scenario is that they will get a very high premium.
Shopping around is the best way to find affordable insurance. This is especially true for high-risk applicants. Before starting the search, it’s best to get a basic understanding of how the process works.
The Underwriting Process
Life insurance companies vary in their qualifications. Some only ask basic questions like:
- Smoking Habits
- Health History
Other companies can be much more comprehensive. In either case, it’s easier for a 40-year-old who doesn’t smoke to find cheap life insurance when compared to a 40-year-old who does smoke. The latter would be considered high-risk.
Fortunately for high-risk consumers, there are a lot of companies who are okay with taking on high-risk customers. The bad news is that the coverage is expensive. Also, these companies can possible have a limit on how much insurance can be purchased. Sometimes, there is no way around paying the higher premiums. In order to get the best deal, always shop around. Get free quotes from different companies.
What Constitutes as High-Risk?
The following are some of the things that are considered high-risk to life insurance companies.
- Heavy Drinkers
- Drug Abusers (even if clean, a history of drug use places a consumer into this category)
- People with type 2 diabetes
- Senior Citizens
- Those with a Family History, where parents or siblings were diagnosed with Cancer or Heart Diseases prior to the age of 70.
If a consumer falls into the high-risk category, what can they do? Here are some tips for finding high-risk life insurance.
Yes, this has been mentioned already but it’s importance cannot be overstated. Shop around for quotes. That is extremely important. Many people settle for the first policy they see – mostly out of fear. As a result, they wind up paying more than the premium is worth. Even if you were declined coverage by one insurance company does not mean you won’t be able to find a policy. Keep shopping around until you find a broker who specializes in your specific type of higher risk insurance. Though many companies will issue non-standard table ratings to those with medical conditions, that statement is not true for all. Certain life insurance providers take on more risk – More risk, more reward (high risk policies have higher premiums associated with them) – Those companies will even issue out standard rates depending on how well your condition is controlled. For example, if you are applying for life insurance for chron’s disease patient you may be able to get a regular rate. So shop around and do not settle for less. Some applicants even go as far as applying for a policy with two different carriers and letting them “fight” for their business in essence. You do not have to pay for life insurance until you accept the issued policy, and you are not required or obligated to do so. You can simply accept the policy that is cheaper and pass on the more expensive one.
Life Insurance that Does Not Require Underwriting
Does such a thing exist? Yes it does. It sounds too good to be true. That’s because it usually is. Policies tend to be awful and charge very high premiums. It’s normally better to find high end insurance companies who offer high-risk insurance. However, the purpose of this article is to show consumers all of their available options. This is definitely an option even though it might be better to just start a bonfire with a bucket of cash. That way at least the consumer gets something for their money.
Accidental Death and Dismemberment Insurance
This life insurance only covers accidental deaths. The premiums are high, the coverage doesn’t cover most causes of death. It’s better than nothing though. Accidental Death policy will pay out a claim if you are a sky diver and happen to die during a jump, but it will not pay out if you are diagnosed with cancer and pass away are loosing your battle.
Address Health Concerns
Yes! A useful solution. This one is easy. If the applicant is a smoker, then stop smoking. If the consumer had cancer but has irradiated it through chemotherapy or some other means, reapply. If there is a history of family illnesses that was the source for the high-risk stamp, then get a complete physical and prove that the illness isn’t an issue. Obese people can lose weight. I think the point has been made here. Do anything to prove that the high-risk stamp can be improved. Sometimes just the effort to be healthier can pursued insurance companies to remove the stamp. This is no guarantee but worth a shot. Besides, being health conscious is always a good idea regardless. One more thing should be added to this category. Once these steps have been taken, shop around yet again and get more quotes.
Use a Savings Account Instead of Life Insurance
This is not a recommendation, it’s a last resort. If no one will insure a consumer then this can be their only hope. 99% of the time it’s better to continue shopping around and try to become more health conscious. This is really an option for someone who is very desperate. It’s also a good idea to start saving while shopping around.