Many people who have experienced a serious health condition such as cancer, a heart attack, or a stroke may be denied life insurance coverage through traditional means.  Luckily, it is not impossible for these people to obtain life insurance coverage.  While major companies will take on a small amount of high risk or “special risk” cases, there are companies that specialize in writing high risk life insurance policies.  It is important for clients who are special risk class to get quotes from multiple insurers because the cost of life insurance can vary widely depending upon each companies assessment of the risk involved.

A policy with an insured person who is deemed to be high or special risk is given a “sub-standard” health rating.  Some companies have different classes of sub-standard risk policies, and some companies group all sub-standard policies into one risk pool.  Generally speaking, if you are not on the highest risk side of a sub-standard rating, you will save money by going to a company that underwrites different classes of sub standard ratings.  If you are at the “lower end” of the risk pool, meaning you pose the highest risk to insurance companies, you are better served seeking a policy from a company that groups all high risk policies into the same risk pool.

What Conditions May Classify Someone As High Risk?

There are certain health conditions that will almost always classify someone as a sub standard health rating automatically.  The two most common ones are cancer and heart attacks, but other conditions such as stroke, aneurysm, diabetes, fibromyalgia, partial or total paralysis, blood disorders, degenerative nerve disease, or even mental illnesses may also push someone to a sub-standard health rating.

It is important to remember that life insurance companies do not all classify risk the same, and any number of conditions could result in someone being perceived as having a much higher than normal chance of passing away during the period of time which would result in a financial loss to the life insurance company.   The only way to be certain that a life insurance company will rate you as sub-standard is to go through the full underwriting process with the company.  You may also check with an insurance company before applying to see if your condition is likely to result in a sub-standard rating.

What To Do If You Need A High Risk Policy

If you need a life insurance policy and you are likely to be perceived as a high risk, you need to work with a company that specializes in finding you the best rates.  While most major life insurance companies are sometimes willing to take on a high risk individual as a policy insured (as long as the amount of coverage is not too high), some companies that specialize in special risk cases are able to provide cheaper life insurance coverage.

This is because their underwriters deal exclusively with the classification of sub-standard ratings.  They often break the sub-standard ratings categories up into more specific groups, thereby allowing them to give “healthier” special risk individuals lower premiums.  You may need to go to several companies before you find a fit for a policy, because most have thresholds for how many high risk policies they are willing to carry on their books and you may find the perfect policy if your timing is right with a company.

No Underwriting Policies

Some companies offer policies available with no underwriting.  These are typically the most expensive policies, and are usually only available with a face amount up to about $250,000.  Each company has its own policies regarding the risk that they are willing to take.  Some companies will take on high amounts, because they go to a “reinsurer” to reduce some of their risk.  While high risk policies are expensive, and have limitations to the maximum face available, for someone with no other options, this can be an invaluable lifeline of protection.  Typically these are term life insurance policies, and the total premiums due will be more than the total face amount of the policy, if payments are made for the entire term of the policy.  Only choose a no underwriting life insurance policy if you can not obtain a policy through more traditional means, as it is almost certain to cost you the most money.

Term Or Whole Life?

Someone seeking a high risk life insurance policy has the option of choosing between a term life insurance policy or permanent forms of coverage such as whole life insurance.  Typically, high risk individuals end up choosing term coverage because the cost of a permanent policy can be prohibitive when someone is assigned a sub standard rating.  If the owner still  needs the life insurance to be in force at the end of the policies term, they usually will still have options.  The term life insurance is usually renewable (though for a higher cost than the annual premium during the specified term).  The owner also has the option to convert most term life insurance policies to whole life insurance, but this often can only be done before a certain number of years has passed, or after a certain number of years has passed, depending upon the policy specifics (different companies have different rules regarding term conversions).

Other people still favor the cash value component of a permanent form of life insurance.  A high risk policy will still have a guaranteed cash value component which grows tax free. Whole life policies with sub standard ratings still partake in dividends, and owners can still take loans and withdrawals from their policies.  If you prefer to have these features, a permanent form of life insurance may be for you.

How Life Ant Can Help

Life Ant can help you find a high risk policy by comparing life insurance quotes from many different providers.  You can search for the company that provides the best high risk rates for your age, gender, and geographical area.  This can help narrow the list of companies that you apply to.  Life Ant works with insurance providers who specialize in high risk life insurance policies.  This saves you time and money.

How We Work with So Many Providers

Life Ant has a relationship with many companies that allow us to compare life insurance prices from each of them, given some basic information.  We feel that by comparing quotes from many different providers, we give our clients the ability to find the best policy specifically for them.  We work with major trusted life insurance companies that you can count on to remain pillars of financial strength.

Leave a Reply

Please fill all the fields below (your email won't be displaied on the site).