What is high-risk life insurance?
High-risk life insurance refers to life insurance designed for people with a higher than normal risk of injury or death. A high-risk policy takes into account lifestyle, occupation, medical conditions and medical history. An insurer has the right to look into these details and determine whether the person is high-risk.
Some insurers do not offer plans for high-risk customers while others will offer specific plans for such people. Regardless of this, if a person is determined to be high-risk, insurance premiums will increase.
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Who needs high-risk life insurance?
High-risk life insurance is targeted at people with a higher than average likelihood of making a claim because of medical, job or lifestyle factors. When buying insurance, an insurance expert will evaluate these factors to find out if you are high-risk. Here are some situations where you'd consider high risk life insurance:
- Serious medical conditions or a history of medical conditions. Illnesses such as cancer, diabetes or hypertension can qualify, as can obesity.
- High-risk occupations. Working in jobs like commercial fishing, mining or heavy industry.
- A history of alcohol or drug abuse. Smoking, drinking and drug use can place you as a higher risk applicant.
- Frequently engaging in dangerous lifestyle activities. This can include boxing, contact sports, racing or extreme sports.
Will I have to pay more for high-risk life insurance?
With the exception of a few cases, high-risk insurance will cost more than standard insurance.
The insurer has to take into account that you have a higher than normal chance of making a claim, and as a result, the premiums will be higher. How much so can depend on a number of factors and will be determined by experts who manage risk.
If you are high-risk because of a medical condition you may have to go through an examination. Age, weight, smoking status, occupation and lifestyle can all play roles in determining the price of a high-risk policy.
Will all brands offer high-risk insurance?
Not all brands offer high-risk insurance. Some brands will decline standard insurance if they determine that a person is high-risk, whereas other companies will increase the premiums to account for the higher risk. There are some brands that specifically target high-risk individuals and offer guaranteed coverage.
How do I qualify for standard life insurance in order to spend less?
It is possible to qualify for standard life insurance at a future date, thus decreasing your life insurance premiums.
The easiest way to do this is by addressing the problems that make a you high risk. For example, if you are high-risk because of smoking it will help if you quit, or if you are high-risk because of a weight problem it can be beneficial to trim down. Find out why you are high-risk and work on ways to improve your situation – it can affect your health and your wallet in the long term!
Some insurance brands offer rewards programs to not only help you improve your health, but to also help you achieve a lower life insurance premium.
Questions to Ask When Applying for High Risk Life Insurance
When you are applying for any life insurance product, there are certain questions you should ask.
1. What does it cover?
This is the easiest, but also, most complicated question to have answered. While your insurance provider or adviser will likely give you a high level explanation of what your policy will cover you for, it is best to go deeper than that. Really do your research. Go online and check out reviews of the policy and compare them with others online. More importantly, read your policy document thoroughly. Pay close attention to the cover benefits and exclusions sections.
2. Why does the insurer think I’m high risk?
This is a great question to ask. Not all insurers will have the same definition for a risky candidate. Shop around. You may be able to get a better deal from another provider. Additionally, knowing why you are high risk will help you make some self evaluations. If you are high risk because of a lifestyle choice or because of your general health, there are steps you can take to reduce or minimise the levels of risk you are exposing yourself to. If your situation does change, and you believe that you are no longer a high risk, talk to your insurer and have them change your policy. This could save you a lot of money in the long run..
3. Who is the insurance underwriter?
If you are taking out a policy through a adviser, ask them who is underwriting the policy. It is important to know from the outset whether you are dealing with a reputable insurer. If you don’t not know the provider, do some research and find out what they are like.
- How long have they been in business?
- How likely are they to payout on a claim?
- Are they in danger of going bankrupt?
Having a definitive answer for questions like these will ensure that you have peace of mind knowing that your family future is in the secure hands of a reputable insurer.
4. Is my high risk activity even covered?
Even if you have found a high risk life insurance company, it doesn’t mean they will automatically give you cover. Make sure that they cover the risks specific to you.