When choosing life insurance, the company will set your rates based on your risk level. In this article we will discuss, what is high-risk life insurance?
When choosing a life insurance policy, it’s usually best to go with one that offers competitive rates and a substantial death benefit. However, in most cases, to get reasonable premiums, you have to be considered “low-risk.” However, those in a higher risk category can still get coverage, even though it can be more challenging.
In this article, we’ll discuss the various ways that someone might be considered high risk, as well as look at the types of insurance available. If you fall into one of these categories, life insurance is still possible. At NextGen Life Insurance, we can help you compare plans to find the right option for your needs.
What is High-Risk Life Insurance?
All insurance companies want to mitigate the level of risk that they underwrite. Ideally, to help save on claims and benefits, insurers want to cover those who are as low risk as possible. For life insurance, this means individuals in good health and no risky behaviors. Depending on how the insurance company assesses you, your rates can be relatively low or high.
High-risk life insurance simply means that the insurer is providing coverage for someone who has a much higher risk of death. In some cases, the risk can be health-related, such as a family history of heart disease. In other instances, the risk may stem from a dangerous occupation, such as law enforcement or firefighter.
Because each type of risk is different, each insurance company will have unique rules regarding how to cover it. Sometimes, however, being high-risk means the person will get denied coverage.
One thing to keep in mind, though, is that some insurers will cover high-risk individuals. So, if you fall into this category, don’t get discouraged by getting declined. Although your options are not as broad as someone with low risk, you can get life insurance.
What is Considered High Risk?
While each insurance company has its own definition of high risk, there are four broad categories that we’ll go over. Some of these risks can be minimized or eliminated, while others might be inherent. Depending on the type you fall into and the amount of coverage you want, you might be able to get sufficient protection for you and your loved ones.
For some, the best way to spend free time is by getting the adrenaline flowing. Unfortunately, while these hobbies can be exhilarating, they can also be dangerous and, sometimes, life-threatening. Here are some common activities that are considered high risk, as well as why insurance companies classify them that way.
Although the water may be peaceful, the insurance company wants to be sure that you’re not putting yourself in harm’s way. Some of the questions you’ll get asked if you scuba dive can include:
- How often do you dive?
- How deep do you go?
- Do you dive in an overhead environment? (i.e., under ice, underwater caves, etc.)
- Are you certified?
- Do you dive for recreation or professionally?
- Are you a rescue diver?
- What is the deepest you’ve dived before?
If you only dive every once in a while under supervision, you’ll be considered low risk. Conversely, deep-sea diving in overhead environments or diving for rescue operations will place you in a high-risk category.
You can help your case by getting certified. Training shows that you know how to react in potentially hazardous situations, which can help your case.
The thrill of zooming on the track can be breathtaking, but piloting a car at such high speeds can make a collision much more likely. In this case, the insurance company will want to know the following details:
- How often do you race?
- What kind of safety equipment is in the car?
- How many hours have you raced behind the wheel?
- Are you certified?
- What’s the average speed you travel?
- Are there any obstacles on the track?
For some, skydiving is a one-time experience that gets crossed off the bucket list. For others, however, the exhilaration of falling through the air becomes intoxicating. Here are some questions you’ll get asked if you skydive regularly:
- How often do you skydive?
- Do you jump solo or in tandem?
- How many jumps have you done?
- Do you jump with a group or by yourself?
- Have you ever been injured from a jump?
Other Examples of High-Risk Hobbies
If you participate in any activity that could physically harm you, notify your life insurance agent. Some companies may not raise your rates for some hobbies, while others will. Overall, the insurer wants to be sure that you’re taking extra precautions when participating in high-risk activities. Some other examples of these hobbies can include:
- Bungee Jumping
- Boxing/Mixed Martial Arts
- Downhill Skiing
If you’re not sure if your hobby qualifies as high risk, it’s best to disclose it anyway. If you don’t and the insurance company finds out about it, you could lose your coverage altogether. Even if you don’t indulge in your hobby regularly, it’s always good to notify the life insurance company.
Life-threatening diseases can occur at any time, particularly for those with a family history of them. For example, if any of your relatives – mainly your parents – have had heart disease, there is a much higher chance you’ll develop it at some point.
Typically, the questions insurers will ask for high-risk illnesses will include:
- When were you diagnosed?
- What treatment plan are you on? What medicines are you taking?
- How long have you been taking this treatment?
- What is your prognosis?
- Have you been hospitalized because of this condition?
- Has this disease impacted your ability to perform simple tasks?
- How often do you meet with your doctor?
- Do you have any other health conditions?
These questions, along with your current age, can potentially get you denied for most life insurance. Usually, companies want to see that you have the condition under control.
The longer you’ve been without a severe incident or hospital admission, the more likely you can get approved. Unfortunately, your options will be much more limited if your disease is degenerative (i.e., Alzheimer’s).
Common high-risk diseases can include:
- Heart Disease
- Multiple Sclerosis
When talking with your insurance company, be sure to have all of your medical information handy to answer any questions that come up. Also, it’s a good idea to familiarize yourself with the steps of a paramedical exam, so you know what to expect.
Some occupations are naturally higher risk than others. In this case, the life insurance company will want to know how dangerous your profession is and what steps you or your employer are taking to minimize that risk.
As with high-risk hobbies, each company will have its own rules regarding coverage options for different occupations. Some examples of jobs that would fall under this category include:
- Law Enforcement Officer
- Farmer or Ranch Hand
- Construction Worker
- Commercial Fisherman
- Miner – Coal, Gas, etc.
- Forklift Operator
- Helicopter Pilot
Typically, any profession that involves heavy machinery can pose a risk. Also, if you are putting yourself into dangerous situations, such as flying a rescue helicopter, the insurance company may decline you for coverage.
Again, if you’re not sure whether your job qualifies, it’s still worth mentioning. It’s far worse for the insurer to find out after the fact, as you could either lose your insurance altogether or get hit with higher rates.
If the parameters of your job change, you’ll want to notify your agent as soon as possible. For example, if you were working in the field but are now at a desk, that could improve your coverage options.
Most of the time, a habit won’t necessarily impact your insurance rates. However, some activities can put your health at risk more than others. Here are a few common examples of high-risk habits that can influence your coverage options.
In many cases, insurance companies may not offer a policy to an active smoker. Because smoking can be such a health risk, insurers could decline you regardless of any other information you provide.
That being said, if you’re a former smoker, you might be able to get relatively good rates. You will need to answer these questions to determine your options.
- When did you start smoking?
- When did you quit smoking?
- Are you undergoing treatment to help you quit? (i.e., a nicotine patch)
- Have you been hospitalized for a smoking-related illness or condition?
- Have you had surgery related to smoking?
- How long were you a smoker?
Unfortunately, if you were a heavy smoker for many years, some of the damage to your body can be permanent. However, the longer you go without a cigarette, the more your lungs and organs can heal. Typically, if it’s been more than 10 years since you last smoked and you’re in good health, you can get preferred rates.
Like smoking, alcohol can damage your body in various ways. While a few drinks aren’t going to be as risky as having a few cigarettes, some insurance companies might be wary. Some questions your agent might ask include:
- How often do you drink?
- What type of alcohol do you drink?
- Have you ever drank more than five drinks in a night?
- Do you get drunk?
- Have you ever been admitted to a rehabilitation facility because of your drinking?
- Have you ever participated in an alcohol recovery program?
- Do you have a family history of alcoholism?
- Have you ever been hospitalized because of a drinking-related problem?
- Have you ever been arrested for drinking?
- Is there a DUI on your record?
Although they are not directly related to your health, having a DUI on your record will make you a much higher risk. Overall, casual drinking shouldn’t affect your rates that much, but it’s still a good idea to disclose all of the details of your habits. Also, a family history of alcoholism can increase your rates, even if you don’t drink very often.
Other Examples of High-Risk Habits
If you indulge in any of these other activities, be sure to notify your insurance agent. As a general rule, as long as the habit doesn’t impact your long-term health or lifestyle, it shouldn’t raise your rates significantly. Depending on the situation and the frequency of the habit, it may not increase your premiums at all.
- Cannabis Usage (if legal)
- Chewing Tobacco
Insurance Options for High-Risk Individuals
Although you may be classified as high-risk, that doesn’t mean that life insurance is out of reach. One of the best ways to find adequate coverage is to compare plans and rates from as many companies as possible. Although it can be discouraging to get declined, it shouldn’t stop you from getting the peace of mind that life insurance can provide.
Depending on your situation, you may be able to qualify for whole or term life insurance. If not, these options are usually still available.
This coverage is designed to help pay for end-of-life expenses, such as your burial and funeral service. The maximum death benefit for burial insurance is often capped at $25,000, but there are no requirements on how your beneficiaries can use the funds.
If you’re a high-risk individual, buying a policy for yourself will likely be too expensive. Instead, group insurance rates can be much more affordable since you’re buying coverage with other people.
Usually, group insurance is offered through an employer, so your options can be limited. However, in some cases, you might be able to get multiple choices on rates and death benefit amounts.
Guaranteed Acceptance Life Insurance
We regard this type of insurance as a last resort. We don’t necessarily recommend guaranteed acceptance coverage because the premiums are much higher than average.
That being said, if you need to provide financial security for your loved ones and other options are unavailable, this can be a good choice. The death benefit will be relatively low – in some cases, it’s capped at $15,000. However, it can be better than no coverage at all.
Contact NextGen Life Insurance Today
We make comparing coverage options easy. Contact us to find out how we can help you get life insurance, even if you’re considered high risk. At NextGen Life Insurance, we’ll do the hard work for you, meaning that peace of mind is much more attainable than you might think. Get a free quote from our online quoter today!