Life insurance for high-risk applicants

When you apply for life insurance, the insurance company considers your age, gender, medical history, and lifestyle to determine eligibility and calculate your premium. Individuals with no major health issues should have no trouble obtaining coverage. Some people, however, have risk factors that make them more of a risk for insurance companies. These individuals, known as high-risk applicants, still have life insurance options, but it may be beneficial to understand what those options are.

What makes you a high-risk life insurance applicant?

A high-risk life insurance applicant is someone who has health or lifestyle risks that make them more difficult to insure for life insurance companies. Each life insurance company has its own definition of high-risk life insurance applicants. However, life insurance companies may consider you a high-risk applicant if you work in a dangerous occupation, participate in risky hobbies such as skydiving, smoke, have poor health, and/or have underlying health conditions.

Life insurance quotes, unlike home and auto insurance, are based on the applicant's life expectancy. On average, the higher your risk of dying prematurely, the higher your premium. Some life insurance companies will limit the policies available to you if you are deemed a high-risk applicant. Some companies may only provide you with a guaranteed issue policy, which is a high-cost no-exam life insurance policy. Other companies may still offer term life insurance, but your rates will most likely be high.

So, how do you know if you're a high-risk applicant? Life insurance companies typically require you to complete a medical exam that measures key health markers such as height, weight, blood pressure, nicotine usage, alcohol consumption, prescriptions, family medical history, and current medical conditions to determine your underwriting risks. If you are deemed high-risk, the insurance company may refuse to insure you. Even if you are able to obtain a policy, you may be required to pay higher premiums or undergo a waiting period before you are fully covered. Your medical risks and lifestyle are the two most important factors in determining your eligibility for life insurance.

Medical risk

Life insurance companies want to know about your personal medical history, as well as any illnesses in your family history that may make you a high-risk applicant. You are considered high-risk if you have any of the following conditions:

Cancer: Being diagnosed with any type of cancer will almost certainly place you in the high-risk category for life insurance. Most insurance companies will require you to be cancer-free for a certain number of years in order to purchase a policy.
Heart attack: If you have had a heart attack in the past or have been diagnosed with heart disease, your ability to obtain life insurance will be impacted. People who have had one heart attack are more likely to have another, posing an additional risk to the insurance company.
Stroke: Strokes can make it difficult to obtain life insurance. Most traditional life insurance companies will not approve you for a policy if you have had a stroke within the last year or if your stroke resulted in other health issues, such as paralysis.
Dementia: Because there is no cure for cognitive disorders, people suffering from dementia must obtain high-risk life insurance. According to the Alzheimer's Association, the average person with Alzheimer's lives four to eight years after diagnosis.
HIV/AIDS: Even if their disease is well-managed, people who have been diagnosed with HIV or AIDS are considered high-risk. According to some studies, people living with HIV/AIDS have a lower life expectancy than the general population.

Other health issues may not immediately qualify you as a high-risk applicant. For example, life insurance for diabetics can be quite affordable, particularly for policyholders with well-managed Type 2 Diabetes.

Lifestyle

Your lifestyle is another important factor in determining your life insurance risk. Even if you have no medical issues or a family history of illness, you may be considered high-risk due to factors such as your occupation, habits, and hobbies:

Occupation: The amount of risk you face on a daily basis is determined by the occupation you hold. Underground miners, steelworkers, construction workers, and commercial fishermen are examples of high-risk occupations. According to the Bureau of Labor Statistics, fishing and hunting were the most dangerous occupations in 2019, with 145 deaths per 100,000 workers.
Hobbies: If you are a thrill seeker, you are most likely in the high-risk category. Insurance companies want to know if you engage in potentially hazardous hobbies such as scuba diving, mountaineering, skydiving, or motorcycle racing.
Nicotine use: Smoking poses a number of health risks, including the development of certain types of cancer and COPD. If you smoke, vape, or chew tobacco, life insurance companies will most likely consider you high-risk. If you were a former smoker who quit, you may not be considered high-risk, but you may still be required to pay high premiums. Importantly, life insurance for smokers is typically available, but you should expect to pay a higher premium.
Alcohol consumption: If you consume more alcohol than the recommended serving amount, life insurance companies will most likely consider you a high-risk customer. Alcohol abuse can lead to other health problems and increase the risk of an accident.

How do high-risk life insurance rates work?

Most of the largest life insurance companies assign applicants to one of the following rating categories based on their level of risk in order to calculate rates. It should be noted that not all companies use the same classes during the underwriting process. However, applicants are typically assigned to one of the following underwriting classes by life insurance companies:

Preferred select or preferred plus: This rating group includes the healthiest applicants who have a clean bill of health and no family history of genetic illnesses, no high-risk occupation or hobbies, and no bad habits such as smoking.
Preferred: Preferred candidates are typically healthy individuals with one or two marks against them. For example, they may have a minor medical condition or a potentially dangerous hobby.
Standard: If you have a few medical issues or lead a risky lifestyle, you may fall into the standard category and pay higher rates than those in the preferred plus and preferred groups.
Substandard: Applicants who are deemed high-risk by the insurance company are most likely in this category. These candidates may have a hazardous job, a dangerous hobby, or medical issues.
Preferred tobacco: Applicants who have quit smoking or are otherwise healthy may qualify for the preferred tobacco rating group and will most likely pay lower rates than those in the standard tobacco rating group.
Standard tobacco: Most smokers most likely fall into the standard tobacco category. Because smoking can cause cancer and other health problems, those who smoke will most likely face high premiums.

How to find high-risk insurance

Because life insurance companies classify risk differently, you may want to research your options and obtain quotes from a few different providers to find the most affordable company for you. Some companies are more concerned with your recent health, whereas others are concerned with your entire medical history. Some companies may be more concerned with a dangerous occupation, while others may be more concerned with smoking.

You may want to begin your insurance search by identifying local life insurance companies that specialize in high-risk life insurance. If you're a high-risk applicant having trouble finding a life insurance company that will accept you, speaking with an independent life insurance agent may be beneficial. They might be able to direct you to companies that cater to high-risk policyholders in your particular situation. For example, there could be a company nearby that provides excellent coverage to smokers. In addition to whole and term policies, an independent insurance agent may be able to walk you through policy options such as guaranteed issue life insurance.

Frequently asked questions

What is the best life insurance company?

The best life insurance company is unique to each individual. It is determined by factors such as your age, overall health, the type of policy you desire, and the amount of coverage you require. By shopping around and comparing providers based on your personal criteria, you can find the best life insurance company for you.

How much life insurance do I need?

The amount of life insurance you require should be determined by your income and the financial needs of your family. A life insurance coverage calculator can assist you in determining how much coverage is appropriate for your situation.

Can you save money on high-risk life insurance?

Even if you are considered high-risk, you can still save money on your life insurance policy. Because the cost of life insurance is heavily influenced by your medical history, focusing on improving your overall health is a good place to start. For example, if you are considered high-risk because you smoke and are overweight, you should consult with your doctor about losing weight and quitting smoking. To avoid further complications, if you are taking medication to manage HIV/AIDS or another health condition, continue to take your prescriptions. If you are a scuba diver, consider finding a less dangerous hobby that you enjoy.