When you apply for a life insurance policy, the insurance company looks at factors like your age, gender, medical history and lifestyle to determine your eligibility and calculate your premium. Most people with good health are able to get a policy. Some people are more at risk than others for insurance companies. These high-risk applicants are known as high-risk applicants. However, they still have life insurance options. They should be aware of what these options are.
What are the characteristics of a high-risk applicant for life insurance?
“A high-risk life insurance applicant is someone who has pre-existing health concerns,” says Jake Irving, owner of Willamette Life. Each insurance company has its own standards for high-risk underwriting. Some companies only look at the applicant’s medical history for two years while others have a more comprehensive view.
Unlike home or auto insurance, life insurance quotes are based on the applicant’s life expectancy. Your insurance company will ask you if you are more likely to die prematurely when you apply for coverage.
As of 2018, the average life expectancy in the United States is 78.7 years old. The average life expectancy for males is 76.2 and that for females is 81.2. This is why seniors pay more for life insurance than young people.
Life insurance companies often require applicants to undergo a medical exam. This is done to determine your underwriting risk.
How can you tell if you’re high-risk?
It is crucial to know whether you are in the high-risk group before you apply for life insurance. This will allow you to plan your next steps. Irving says that if you are deemed high-risk, you may be denied coverage or have to pay more premiums. Your medical history and lifestyle are the two main factors that will determine whether you qualify for life insurance.
Insurance companies will want to know your medical history and family history of illnesses that could make your application high-risk. High-risk applicants are those who have one of the following conditions:
- Cancer: If you have been diagnosed with any kind of cancer, it is likely that you will be considered high-risk for life insurance. Most insurance companies require that you are cancer-free for at least five years before you can purchase a policy.
- Heart attack: This will affect your ability to obtain life insurance if you have ever had a heart attack or been diagnosed with heart disease. Insurance companies are more likely to take on additional risk if someone has had a second heart attack.
- Stroke: A stroke can impact your ability to obtain life insurance. A majority of life insurance companies won’t approve traditional policies if you have suffered a stroke in the past year or if your stroke caused paralysis.
- People with dementia need high-risk insurance because there is no cure. On average, a person with Alzheimer’s lives four to eight year after diagnosis.”
- HIV/AIDS: Anyone with HIV/AIDS is considered to be at high risk, even if they have managed their condition well. According to some studies, people with HIV/AIDS live longer than the average person.
Lifestyle is another important factor that will determine your life insurance risk. Your lifestyle, including your occupation and hobbies, can make you high-risk even if there are no family medical history or any other health issues.
- Occupation: The amount of risk you are exposed to each day is determined by the life insurance companies. Underground miners, steelworkers and construction workers are some examples of high-risk occupations.
- Hobbies: You are likely to fall under the high-risk category if you consider yourself a thrill-seeker. Insurance companies are interested in knowing if you have any dangerous hobbies such as scuba diving or mountaineering, skydiving, and motorcycle racing.
- Nicotine: The use of nicotine can cause a variety of health problems, including COPD and certain types of cancer. Life insurance companies will consider you high-risk if you use vaping, smoke, or chew tobacco.
- Drinking alcohol: Life insurance companies may consider you high-risk if you consume more alcohol than is recommended for men and women. Alcohol overconsumption can lead to other health problems and increase the chance of getting into an accident.
What does high-risk life insurance rate work like?
To calculate rates, the largest life insurance companies use a table rating system. “With table ratings, the applicant receives a letter (A-P) or a number (1-16) indicating the percentage increase over the regular premium level,” says Linda Chavez, founder of Seniors Life Insurance Finder.
For each letter or number in the table, the standard premium is increased 25%. If the standard premium is $100 and a table rating is B, the premium will be $150. This premium is half the standard rate. Chavez adds that a rating of 7 can result in a premium of 175 percent over the regular rate or $275 more.
While many high-risk life insurers use a table rating system to assess applicants’ risk, each insurance provider evaluates the applicant risk in a unique way. Chavez says that an insurer might assign a table rating for someone with high cholesterol while another might offer the same person regular life insurance rates. The second provider may specialize in policies for high-cholesterol individuals.
Are you high-risk and can you save on your life insurance?
It is possible to save money on life insurance policies even if you are considered high-risk. Your medical history is an important factor in life insurance premiums. It’s a good idea to improve your health.
If you’re high-risk for smoking or are overweight, talk to your doctor about losing weight and quitting. To avoid complications, you should continue taking your prescribed medication if you take medication for HIV/AIDS treatment. You don’t have to be a scuba diver to enjoy surfing, which is a safer hobby than diving.
Do your research before you purchase coverage. Irving says that each company has its own standards for qualifying, so some companies may be more accommodating to certain conditions than others. The cost of life insurance is largely dependent on the provider you choose.
“Some companies are more accommodating to diabetics than others,” Irving says. Irving says that the best way to get the best rates is to compare plans on your own or with an agent. If you believe you are paying too much for life insurance, you always have the option to switch carriers.
Questions frequently asked
Which is the best life-insurance company?
The best life insurance company is different for everyone. It all depends on your age, overall health, type of policy and amount of coverage that you require. Shopping around for life insurance companies and comparing them using your criteria will help you find the right one.
What amount of life insurance do you need?
Your income and family’s financial situation should determine how much life insurance you need. You can use a life insurance coverage calculator to help figure out how much coverage is best for your situation.