The basic concept of purchasing insurance is to transfer the risk from yourself to an insurance company. With life insurance you are transferring the risk of pre-mature death to the life insurance company. However, what do you if you’re considered high risk and you’re not sure if a life insurance company is willing to insure you?
The reason there are so many different life insurance companies in the United States is because they all look at risk differently. If they all viewed risk the same exact way, then there would be no competition and many insurance companies would go out of business. This is why comparison shopping is so important.
Now while every life insurance company wants to get the youngest, healthiest, and fittest people to buy insurance, realistically that’s only a small portion of the overall population. So they have to be willing to take on people with a higher degree of risk and price their premiums accordingly.
What Is High Risk Life Insurance?
The simple answer is that, you as the proposed insured, present a higher risk to the life insurance company than an “average” or “standard” person would.
What Is a “Standard” Insured Person?
In insurance terms, a “standard” person is a proposed insured that would present normal or average risk to the insurance company to insure. They are generally expected to live as long as the average life expectancy for their gender, age, occupation, and lifestyle.
Does This Mean I Have To Live In a “Bubble” To Get The Best Rates?
Again the simple answer is no! No life insurance company would expect you to live in a “bubble” and present zero risk to them. In fact, if that was the case then they would all be out of business, because they would have no one to insure!
The reality is that insurance companies employ many people called actuaries. These actuaries usually have backgrounds in mathematics and statistics. What these actuaries do are put together mathematical formulas and statistics to calculate how much risk an insurance company is taking on for every person it insures. And more importantly, how do they minimize the impacts of financial losses associated with these risks.
What Risk Factors Goes Into My Rate and Who Falls Into High Risk Category?
Life insurance companies look at a wide number of risk factors and any number of people can fall into the high risk insurance category, including those who are perfectly healthy. Usually the scales goes from Preferred Best (which is the best rate you can get) to a substandard rating usually from A-Z, with A being a better rate than Z (some companies also use numbers like 1-26 instead of letters). There are generally two types of risk, health related and occupational/vocational risk. Sometimes referred to as controllable and non-controllable risk.
Controllable Risk:
These are factors that are in your control to some degree which can effect the amount that you would pay for life insurance.
Your Occupation or Lifestyle
Do you like to scuba dive or sky dive (or anything else that ends with dive) on the weekends? What about racing motorized vehicles? Depending on your occupation and/or lifestyle, life insurance companies will take a close look when evaluating your rate.
This type of risk involves people who have unique hazards related to their occupation or vocational activities. Some examples of these are pilots, other than commercial aircraft or those who like to frequently go skydiving or scuba diving on the weekends. For these unique scenarios we would ask you to fill out a specific questionnaire related to the activity and include that as part of your application to the life insurance company for them to determine if your involvement justifies an additional risk premium.
Tip: Law enforcement personnel and firefighters generally pay the same rates that are commercially available, the one exception is active duty military personnel with deployment orders.
Smoker vs. Non-Smoker
This is pretty straight forward. Many years of research have consistently shown that people who smoke cigarettes are more at risk for a variety of health aliments, diseases, and cancers. They also tend to have shorter life spans than those who don’t smoke. In fact, recent studies have even shown second and third hand smoke to be just as equally detrimental to your health as first hand smoke (fortunately, I do not know of any insurance companies that look at second or third hand smoke). So bottom line is that smokers can get insurance, but will generally pay higher rates for life insurance than non smokers.
Note: If you have quit smoking recently or only smoke an occasional celebratory cigar several times a month, there are many life insurance companies that will offer you non-smoker rates. To find out if you qualify for non-smoker rates, contact us.
Your Health
For most people their health will be the biggest factor in determining what the premium rate they will pay for life insurance. The healthier you are, the better rates you will get. However, just because you are not super healthy, it does not mean you cannot get life insurance. Some common health conditions are:
- Arthritis
- Cancers
- Diabetes
- Heart Attack
- High Blood Pressure
- High Cholesterol
- Overweight/Obese
- Sleep Apnea
And many more….
Note: Keep in mind for very serious risk factors like being diagnosed as HIV positive or with terminal cancer. There are guaranteed issued policies. They are typically expensive, have lower insurance coverage amounts and have a 2-3 year waiting period before they will pay out full benefits. For those with no other choice this may be the only option. Call us today to discuss your risk factors so that we can help find you the best rates.
Non-Controllable Risk:
Family History
Unfortunately, genetics plays a big role in who we are as individuals from our looks to our personality. Actuaries also know that they tend to be a pretty good indicator of health risks too. So while you may have gotten your bright beautiful blue eyes from your great grandfather and long curly locks from your grandmother, if all the adults in your family passed away from cancer, the insurance companies are going to take a careful look at this. Unfortunately, this is one part of the equation that is out of your control.
Note: Life insurance companies will ignore family histories that only affect the opposite sex. For example, a male applying for insurance coverage that has a family history of females with breast cancer will be ignored.
Age
While you obviously cannot control your age, you can control when you apply for life insurance. So the younger you are, the more likely you’re in good health and will get a locked in guaranteed low rate. So don’t wait until it’s too late to get affordable life insurance coverage.
My Doctor Says That There Is Nothing To Worry About? 
It’s important to know that when an insurance company is underwriting a case they are looking at a “moment in time” and have to make a decision as to whether to offer you coverage or not based on this information. Unlike a doctor, who could call you for a follow-up appointment every few weeks to monitor your progress of an health aliment and adjust their response accordingly; a life insurance company does not have this luxury. Once they make an offer and you accept it, they are on the hook for the duration of that contract. They can’t call you back in three months to “check up” on you to see how your health condition is going. So because of this they will usually err on the side of caution when making an offer.
How Do I Get Life Insurance If I’m Considered High Risk?
First, it pays (literally) to work with an independent insurance agent such as Stockade Insurance Solutions. Depending on your particular situation, only an independent agent can shop around to get you the best rates for insurance. It’s important to know that every life insurance company rates certain health conditions more favorably than others.
Second, fill out a questionnaire. This questionnaire will asked specific questions related to your particular health condition or lifestyle that are not usually asked on a typical life insurance application. This is will give us a good idea of which insurance carriers to pursue.
Thirdly, there is something called a pre-qualification. It’s a more time consuming process, which is why may agents don’t like to go through this process. However, we can submit an anonymous pre-trial application to an insurance company to see if they will make a tentative offer based on the risk factors in question. It is basically an informal insurance application that is submitted to many different insurance companies to figure out what rating they will give for a particular case. Since it completely anonymous, it won’t show up on your record in case they decline to make an offer. This basically tells us, which insurance company is willing to take a look at your case and would possibly give you the best rate as well.
Tips For Helping the Process Go as Smoothly as Possible
Honesty
Be completely honest in your answers (no sugar coating). It’s important to be absolutely 100% transparent and forthright with whatever health risk condition affects you. This is because the more accurate information that you provide us the better informed we are on to what the best course of action is. Nothing is more frustrating than thinking you are dealing with just high blood pressure and the proposed insured “forgot” to mention that they had a triple bypass surgery last year.
Information
Have all information related to your health condition. This means that if you are taking medication, have the name of the medication, dosage and frequency. If you had a surgery, when did you have it? Where did you have it (address and phone number)? Why did you have it? And who performed the surgery? I think you get the point.
Patience
Be patient. In order to get the best rates, it may take some leg work and homework to get the best rate possible. The life insurance company will want to get information from several sources to get as much information as possible before making a final decision. So patience is key.
Flexibility
Be flexible. Sometimes you may not be able to get what you initially applied for, but we can often find a suitable alternative.
We understand the difficulty in sharing personal medical and health information, but this is an important part of the process so that we can shop around and find you the best policy at the lowest premium.
Note: We value your confidentiality, which means any health related information that you share with us is private, personal, and secured and won't be shared or sold to any unrelated third party without your consent. Period.
Give Us a Call Today To See If We Can Help You With Your High Risk Life Insurance Needs.