In the past, people with certain health issues or occupational backgrounds found it extremely difficult to get life insurance due to the risk factors they were exposed to. These people were considered high-risk individuals in the insurance market.
Fortunately, thanks to the Affordable Care Act passed in 2010, this discrimination has become a thing of the past. Life insurance companies can no longer deny high-risk individuals coverage based on their health. There are now countless quality coverage options for those who find themselves in that category.
One of the long-standing rules of thumb in life insurance is that the healthier and younger you are, the more affordable your plan will be. When you apply for life insurance coverage, the policy provider will collect certain information from you to determine your insurability. This includes your occupation, medical history, and lifestyle. These details will help them understand their risk when insuring you.
Put bluntly, the healthier and safer you are, the lower your mortality and morbidity risks will be. In other words, an individual with health challenges, a critical illness, or a dangerous profession or hobbies has a higher chance of dying earlier or more often than those who are deemed healthy. This increases the chances of the beneficiary filing death benefit claims or medical bill settlements, which is at the expense of the company. The following are what determine your risk factors as a life insurance applicant:
If you have a pre-existing health conditions or if certain critical illness run in your family history, you will be considered a high-risk applicant. They include, but are not limited to:
Some jobs are considered dangerous and high-risk because of the high rates of work-related injuries and deaths in the individual industries. A 2019 report by the Bureau of Labor Statistics (BLS) reveals that over 5,000 fatal work injuries were recorded in 2018 alone. Top on the list of such occupations are:
You will be tested for nicotine and other recreational substance use. The use of tobacco, alcohol, marijuana, some prescription drugs, as well as psychedelics and other controlled substances will increase your life insurance policy cost.
Mountaineering, skydiving, scuba diving, and many other extreme hobbies and sports are categorized as high-risks in the insurance sector. Participants in such adventures will likely pay a higher amount for their insurance application.
Bear in mind that being a high-risk individual may limit your insurance coverage options. A Kaiser Foundation study shows that 27% of American adults have medical records that may classify them as uninsurable in the individual insurance market. While this may be a concern, there are yet several policies that could suit your condition, budget, and preference. Most of them are called no exam plans.
No medical exam life insurance policies are issued without the usual medical examination that is involved with the traditional coverage application. This helps high-risk individuals get coverage quickly and easily by removing the exam that might disqualify them from other coverage options. The two most common no medical life insurance products are:
Also known as guaranteed-acceptance life insurance, this is the most reliable policy for high-risk life insurance applicants. Not only will you not undergo a medical exam, but you will also not be asked any health-related questions. However, keep in mind that some insurers have an age limit for this type of policy. If you can afford it and fall within the age range, you are guaranteed to be insured.
This is also quite similar to a guaranteed-issue policy. The difference, however, is that while there is no medical exam required, you will still need to answer certain health-related questions. This is usually completed through a questionnaire with a list of pre-existing health, lifestyle, and other high-risk factors explained above. It is also not “guaranteed acceptance”, meaning you may be denied for this particular policy on health grounds or other related factors based on the answers provided.
Even as a high-risk applicant, you deserve the best you can get in the insurance market. Buying the right product can make a significant difference in terms of the process, premiums, and benefits of the coverage. The following tips will help:
Here at LifeQuote, we are committed to helping everyone get insured regardless of their health, age, lifestyle, or professional background. We offer simple and affordable life insurance products to low-, medium-, and high-risk individuals with ease and speed. We also work with the best insurance carriers in the United States to ensure that our clients and their loved ones get the financial protection they deserve. To get your customized life insurance quote from us today, you can use our free online quote generator.