Life insurance is a tool used to protect your family financially in the event of your death.
Due to the high level of financial risk involved for life insurance companies who insure people, they must take factors that affect your life expectancy into account when determining life insurance rates and which coverage options to offer people in certain risk classes.
What Is High Risk Life Insurance
As a result of being such a financial risk to life insurance companies, health, age, occupation, family medical history, and lifestyle play a role in determining life insurance rates and which policies to offer people.
Dependent upon these areas in your life, you may be considered a “high risk applicant” for life insurance.
One of these factors that has the largest effect on life insurance rates and the types of life insurance policies that people are offered is your health.
While it is a myth that people in poor health cannot get life insurance coverage, it is certainly a fact that people who are in better health will receive lower premiums and more coverage options than those in worse health.
Let’s take some time to explore how health affects life insurance, and what life insurance coverage for people with health conditions is available on the market.
How Do Life Insurance Health Ratings Work?
The severity of your health will dictate where you fall on the rating scale.
Most life insurance companies have 16 different rate classes. Companies will review your application and assign you a health class.
If you fall below standard underwriting they will give you a table reading.
|Standard||Slightly higher fees|
|Sub-standard||See Table ratings|
Most insurance companies will assign a 25% charge in addition to their standard rate for every table.
The table ratings are often listed by letters or numbers.
|Table A or 1||+25% preferred rates|
|Table B or 2||+50% preferred rates|
|Table D or 4||+100% preferred rates|
|Table H or 8||+200% preferred rates|
Mild to moderate cases of health conditions would place you in the mild or moderate category whereby you can get Table A or B. More severe cases get Table D.
If you have been hospitalized, you have had surgeries, and you regularly use medications for your condition, the best case scenario for you is Table 6 through 8.
How Does Health Affect Life Insurance Policy Options?
Most traditional life insurance policies come in the form of either term life insurance or permanent life insurance.
For people who are in sub-standard health and are somewhere along the table rating health classification, your policy options will likely be slimmer than those in preferred or standard health.
While some traditional policy options may be available for people in poor health, the rates may be so expensive that they are unaffordable, due to the high risk of the company insuring them. As a result, it can seem difficult for people with health conditions to find affordable life insurance coverage.
For people with the following issues:
You may not be eligible for traditional life insurance coverage at all.
This leaves you with a few life insurance policy options. But don’t worry, you can still obtain affordable high risk life insurance coverage.
Can I Get Life Insurance If I Am Considered High Risk?
Absolutely. Just because you are considered a high risk applicant does not mean you cannot get affordable life insurance coverage.
It just means you will be put into a different health rating, often a standard rating. This means higher premiums. There are still different options depending on the severity of your condition and if you have multiple diseases, or if it is the fact that you are a smoker, or if you have a high risk occupation or hobby that you participate in.
Someone with diabetes, well-managed, could easily get standard with affordable rates whereas someone with non-managed diabetes and high cholesterol who is also obese would probably receive a table rating.
Policy Options for People At High Risk
There are two types of no medical exam life insurance coverage options out there, and they are typically reserved for individuals with more severe health conditions. The more severe your health, the higher risk you pose, and therefore, the higher the premiums have to be.
Simplified Issue Life Insurance
This is a simplified version, typically only offered up to $25,000 in death benefits, and you only have to answer a one page long health questionnaire.
No medical exam is required to obtain this type of life insurance. Rates are higher than those for traditional life insurance coverage, but still not as high as guaranteed issue policies. People can still be denied simplified issue coverage depending on the answers to their health-related questions.
Guaranteed Issue Life Insurance
This type of life insurance is guaranteed, so no matter your situation you cannot be turned down.
There is no health exam or questions asked to obtain coverage. Often times, guaranteed issue life insurance can be obtained within 24 hours or less. This is the most expensive type of life insurance in terms of cost per thousand dollars of coverage due to the inherent risk involved.
Can I Improve My Life Insurance Rates If I Improve My Health?
Yes. Most life insurance companies will give their policyholders the choice to submit for medical re-evaluation after holding a policy for 2 years or more.
When you are re-evaluated, the medical examination will take notes on factors such as blood pressure, heart rate, weight, BMI, and chemical levels in urine and blood samples. Depending on how well you do on your medical exam, you may be placed in a more preferable health class, which can land you much lower life insurance rates.
Life insurance companies want to be able to see that you are trying to improve your condition, not just living with health issues and not caring.
That means they want evidence that you are visiting your doctor regularly, that you are using things like diet to control diabetes or heart disease or high cholesterol.
These companies need to see you making an effort if possible. That effort could be the difference between a “preferred” class level or a “standard” class level—and that cost difference can be upwards of few thousand dollars per year on traditional life insurance policies.
How Does Health Affect Life Insurance Rates?
Health issues impact the costs you are charged and in some cases, the policies you have available to you. The reason for this is that life insurance companies need to be profitable.
They use specific calculations to determine the risk you pose, when it is you are likely to pass away, and from that they produce the amount you pay for your premiums.
To determine when you are likely to pass away, they take into consideration things like high risk activities, your job, your age, your gender, and your health. If you are unhealthy, you are likely to pass away sooner than a healthy counterpart who is otherwise the same in terms of age or gender. So, they have to charge you more so that you put more into your coverage.
No exam life insurance rates for people with health conditions
If you have poorly managed conditions with no plans to better control your health issues, then a no-exam policy is going to give you the most affordable premium. If you decide that you want to change your lifestyle and do things like remove a dependence on medication or reduce the medications you are on, you could get better prices for your premiums with a simplified issue policy or even a term policy.
|Age||$5,000 Male (monthly)||$5,000 Female (monthly)||$10,000 Male (monthly)||$10,000 Female (monthly)||$15,000 Male (monthly)||$15,000 Female (monthly)||$25,000 Male (monthly)||$25,000 Female (monthly)|
Term and Permanent Life Insurance rates for people with health conditions
Similarly, different health conditions will impact the prices you are offered. If you have health conditions, your premiums might be an average of:
|Age||Policy Type||$100,000 Male (monthly)||$100,000 Female (monthly)||$250,000 Male (monthly)||$250,000 Female (monthly)||$500,000 Male (monthly)||$500,000 Female (monthly)||$1,000,000 Male (monthly)||$1,000,000 Female (monthly)|
|30||10 Year Term||$22||$21||$25||$21||$50||$43||$86||$72|
|30||20 Year Term||$25||$22||$34||$24||$68||$59||$126||$104|
|30||30 Year Term||$39||$31||$55||$49||$111||$96||$209||$180|
|40||10 Year Term||$29||$21||$34||$25||$68||$55||$101||$88|
|40||20 Year Term||$34||$29||$50||$40||$107||$83||$183||$145|
|40||30 Year Term||$49||$40||$90||$70||$187||$140||$322||$244|
|50||10 Year Term||$43||$32||$56||$40||$112||$82||$179||$131|
|50||20 Year Term||$62||$48||$80||$60||$161||$119||$301||$222|
|50||30 Year Term||$94||$75||$140||$100||$289||$209||$542||$406|
|60||10 Year Term||$65||$49||$115||$75||$231||$150||$442||$283|
|60||20 Year Term||$105||$74||$225||$150||$445||$304||$861||$566|
People who are obese will face different charges for coverage, the same as people with cancer or high blood pressure will too. Remember that in all cases, the amount you are charged is going to vary based on the severity of your health condition.
Best Life Insurance Companies for People with Health Issues
The best company for someone with health issues is going to depend entirely on the health issue.
Some companies are more favorable toward diabetes while others are lenient toward heart conditions.
For this reason it is important to work with a third party broker to determine which companies are best suited to your situation.
|Company||Known for:||A.M.Best||Customer Reviews|
||A+||4.5 / 5|
||A+||4.2 / 5|
|Mutual of Omaha||
||A+||4.1 / 5|
||A+||4.3 / 5|
||A+||4.2 / 5|
Does My Occupation Affect My Ability To Get Life Insurance
There are many occupations considered dangerous by life insurance companies. Some of the most dangerous jobs in the eyes of life insurance companies may be issued at a much higher rate.
There are dozens of dangerous occupations that can increase your life insurance rates and limit your coverage options.
Finding the Best Life Insurance For High Risk
Finding life insurance for people with health issues can be a bit discouraging and often times can become overwhelming.
In order to make sure you find the best life insurance coverage, it is strongly recommended that you work with an independent life insurance agent.
Our agents work with dozens of the best life insurance companies on the market in order to help our clients find the best life insurance rates, policies and companies for those with health issues.
Give us a call to begin speaking with an expert who can help you compare your policy options in order to find the right coverage to protect you and your family.
Or, get started online with our life insurance quote tool to get quick and easy life insurance quotes instantly.