High risk life insurance is life insurance for someone who holds an extraordinary amount of risk for the insurance carrier.
High risk life insurance is for those individuals who either pose a medical risk, or those who are risky due to their occupation and what its duties are.
Why The Insurance Company Thinks You’re A High Risk
High risk life insurance, in the eyes of the insurance company, is the willingness to offer life insurance to someone who poses a threat to the normal life expectancy of the average person.
Your risk profile is based on a couple different types of attributes:
- Your current health
- Your career
- Your daily activities
- Your lifestyle
If any of these categories create extra risk to the insurance company because there is a chance you could die prematurely, you could be classified as a high risk life insurance applicant. Each attribute has a different type of risk, and therefore each is treated differently when you apply for life insurance coverage.
High Risk Health Considerations
High risk life insurance when considering your current health conditions is the most likely of the bunch, and there are a significant number of Americans who fall into this category.
Risky health considerations for the insurer are things which are long-term illnesses, disabilities, or chronic mental or psychological impairments. Simply having the flu at the time of application is not truly a high risk, nor is pregnancy. The company is looking for something more serious.
Conditions such as a history with diabetes, cancer, heart failure, or lung disorders are all things which might classify you as having a high risk profile. Disabilities or psychological impairments can be classified as high risk, and are things such as learning disabilities or physcial disabilities which prevent you from simple daily activities, or any type of impairment which does not allow you to be self sufficent and could pose undue risk to your long term health.
Each and every health consideration when applying for life insurance is looked at in a unique way. Each type has it’s own underwriting requirements based on how the ailment is diagnosed, treated, or cured.
High Risk Occupations
High risk occupations can also be a threat to the insurance company when considering life insurance policies.
While the majority of the working folks do not consider their career risky, there are many professions which host a wide range of dangers on the job.
Risky jobs aren’t just the ones you see on television, like logging or ice trucking, but even more simple jobs like electricians, fisherman, construction workers, or being a pilot. Each of these has different types of threats on a day to day basis, but can all impact the possibility of life threatening accidents or long term disabilities.
Now, just because you are an electrician, for example, doesn’t mean you’re automatically a high risk applicant. There are many other questions involved with what type of activities you perform on a regular basis which may amplify or decrease your risk. Whether you are a residential electrician working on the most basic outlets, or you are are a commercial electrician working with wire and transformers, you would have different levels of risk.
Each and every occupation, just like each health consideration, is looked at individually, and questions which might be asked could range. How often you have to perform certain dangerous tasks, what type of safety gear is available to you, and what type of environment you work in are all separate areas which could be researched.
Hazardous Activities And Risk Classification
Hazardous activities are things which a person might do on their own time, inside or outside of the workplace, which could increase their risk when buying life insurance.
Hazardous activities can include skydiving, mountain climbing, flying as a pilot, riding motorcycles or ATVs, vehicle racing, and a host of other items. These types of risk tend to be much more self-explanatory. Obviously, if you’re a skydiver, you are jumping out of an airplane at significant altitudes. You definitely pose a risk.
When it comes to underwriting hazardous activities, the main factors the insurance company will want to know are the number of times a year you perform the activity, what level of training you may have in the activity, or even if it’s something you do individually or as a group.
Scuba diving can actually increase your life insurance premiums.
Scuba diving is a great example. Scuba diving has a large list of things to consider:
- The depth you dive normally
- The depth you dove the deepest
- What level of diving certification you have
- How long you’ve been diving
- Where you dive: shallow surface, reef, or site diving
- Individual vs team diving
- How often you dive per year
- Do you dive as a part of your occupation
All things are considered when there are hazardous activities listed on your life insurance application. Depending on your level of risk, your rating may not change, or change quite drastically.
Lifestyle Choices and Life Insurance
Lifestyle choices is not a factor for most individuals, but it can have an affect on your purchase.
Lifestyle choices can be something as simple as if you exercise regularly or not, up to those who use marijuana, have criminal charges, or have excessive vehicle violations on their motor vehicle record.
The basic lifestyle choices, such as exercise routine, do not have a profound effect unless you already have been diagnosed with a health issue, where the exercise would be considered preventative or rehabilitative practice.
The highest threats to the insurance company here are the things like criminal record, because those who have a criminal record tend to have shorter life expectancies due to the likelihood of violence, drug abuse, or other dangerous matters.
Again, each of these is looked at on an individual basis, and not every lifestyle choice will have a profound impact on the class risk you receive.
Your Premiums Might Hurt
Depending on how you are classified, you can probably expect a higher premium for a high risk life insurance policy when compared to an standard issued policy.
Life insurance premiums are based on age, health, amount of coverage, and the risk factors involved with the applicant. The age and amount of coverage are going to give the insurance company a base premium to start at, and your other risks, like health or occupational hazards, are going to increase the premium from there if deemed too risky.
You can also be declined if the insurance company is not willing to accept the risk.
Best Practices In Buying High Risk Life Insurance
When searching for life insurance if you have any type of high risk profile, there are a couple ways you can help yourself find the best policy, and the premium.
First and foremost, you’ll do well by using an independent agent. They have the capacity to search the multitude of carriers who specialize in the different types of risks. Not every company will underwrite the different risks evenly. While once company might offer great protection for someone who uses marijuana, for example, it may be a decline at a different carrier.
Do your research ahead of time as best as you can. Try to find out all the different questions which might be asked of you, so you can be prepared to answer them. And when you answer, be sure to give as much detail as possible, including dates of activity or diagnosis, preventative care or safety precautions taken, and any doctors you’ve seen or classes you might have taken.
Be prepared to wait a little longer to have your policy, as well. If there are many factors to consider, the insurance company make as for several documents or ask a plethora of questions before issuing a rating.
Denied Life Insurance?
If you’re still denied life insurance, you may still have a last resort.
There are guaranteed issue life insurance policies which are, as the name implies, guaranteed to be issued as long as you answer a few very, very basic questions. They might not even require an exam of any type, which could be very advantageous if you have health concerns.
If you have any other questions, feel free to contact us and we’ll do our best to help out, or review our blog for more in-depth analysis.
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