Life Insurance

How to Find Affordable High-Risk Life Insurance

How to Find Affordable High-Risk Life Insurance

Find Cheap Life Insurance Quotes in Your Area

Currently insured?
It's free, simple and secure.

High-risk life insurance is a class of life insurance for people who are considered an increased risk to insure. You could be considered a high risk if you have a profession or hobby that puts you in life-threatening situations. Also, insurance companies can consider you a high risk if you have below-average health.

Insurance companies vary greatly on how they classify high risk. Once classified as a high risk to insure, you may be subject to higher rates. Therefore, to find the best affordable life insurance, we recommend getting quotes from a variety of insurers.

How does being classified as high-risk affect life insurance?

The status of being a high risk to insure can have some effects on the cost of a life insurance policy. You may also encounter limited coverage options with regards to the size of the policy available, as some insurers deny applications for specific types of risk. For example, if you are a senior older than 81 years old, then many insurers will not offer coverage unless you have no health issues.

Finally, being classified as a high risk can change the types of policies that are available for you to purchase. For example, if you are placed into one of the highest-risk categories, then AIG only offers permanent life insurance policies. But, for all other health classes, both term and whole life policies are available.

Can I buy life insurance if I am considered a high risk?

You can purchase life insurance if you are considered to be high-risk, but your coverage options may be limited and you will likely have to pay higher rates. Also known as impaired risk insurance, your high-risk status will be determined by several factors, including your health, lifestyle, profession, habits and hobbies. Exact classifications may differ among insurance providers, but these factors help insurers decide whether an applicant is considered high-risk.

The greatest difference between high-risk life insurance and normal life insurance comes in the cost of coverage. If you are classified as high-risk, then the insurer's projected life expectancy for you will be shorter. Therefore, you pose a greater financial risk to the insurance company since it may need to pay out the death benefit sooner than it would for a person without high-risk factors.

Life insurance for high-risk occupations

A dangerous occupation may put you in the high-risk group because there's a chance you'll die while doing your job. For example, 23% of commercial fishermen are fatally injured or die on the job, according to the Bureau of Labor Statistics (BLS) Census of Fatal Occupational Injuries. This is the highest among all occupations and is a reason insurance companies almost always reject applicants with this profession. On the other hand, roofers have a lower fatal work rate and may be able to find life insurance from some providers.

Some examples of high-risk professions include:

  • Underground miners
  • Farmers and ranchers
  • Commercial fishermen
  • Construction workers
  • Roofing specialists
  • Steelworkers

It is important to note that not all life insurance companies have the same definition of dangerous occupations. During the underwriting process, an insurer will ask you questions about the day-to-day activities you perform at your job, along with the working environment. This allows the company to evaluate the key risks of your occupation.

What if my employer offers a group insurance plan?

Employers often offer group life insurance plans to their employees. This is very common in high-risk occupations, as employers want to provide protection for their employees who may have a hard time getting individual coverage.

If your employer offers a certain amount of life insurance at no extra cost, also called basic coverage, we recommend you take advantage of the policy. However, basic group plans are usually restricted in their coverage, with maximum limits of $50,000 or the employee's annual salary. Therefore, we recommend you acquire supplemental life insurance coverage if a basic policy doesn't meet your financial obligations. This can be purchased either as a supplemental plan through your employer or an individual life insurance policy.

Compare rates and options between the employer coverage and what you find through your own research so you can receive the best policy for your situation.

Life insurance for people with high-risk diseases and habits

If you have health issues or a pre-existing medical condition, the severity will determine if you are designated as high-risk. Certain diseases tend to reduce life expectancy and thus increase the overall risk for insurance companies.

You may also be considered a high risk if you have habits that reduce your life expectancy. For instance, if you regularly smoke cigarettes or cigars, you may be considered high-risk, though not all smokers fall directly into this classification. If you have quit for a period of time or only smoke occasionally, you may be eligible for preferred or standard tobacco health ratings.

Examples of high-risk diseases and habits include:

  • Kidney disease
  • High cholesterol
  • Smoking cigarettes or cigars
  • Chewing tobacco

Life insurance companies each have their own risk tolerance for patients with certain types of diseases or conditions. For example, AIG offers insurance to people with coronary artery disease as long as they acquire an attending physician statement. On the other hand, Transamerica Life Insurance denies all applicants with coronary disease. Due to discrepancies like these, it can be beneficial to research underwriting guidelines from life insurance providers to understand what they tend to accept and deny.

Life insurance for high-risk hobbies

Your personal hobbies could also cause you to be considered a high risk when applying for life insurance. This mainly depends on the type of hobby and the frequency at which you participate in it. For example, if bungee jumping is a hobby of yours and you jump 10 or more times per year, then Ameritas Life Insurance would charge you an extra $5 per $1,000 in coverage. But if you jump fewer than 10 times per year, you would not incur this extra fee and would even be eligible for standard health rates.

High-risk hobbies that life insurance companies ask about typically include:

  • Skydiving
  • Scuba diving
  • Bungee jumping
  • Racing (boat, car, bike, skiing)
  • Parachuting
  • Hang gliding

You would not be considered a high risk to insure if you want to try an activity once. For example, if you go skydiving for the first time this year, then a life insurance company would typically not determine you to be high-risk. As mentioned, the frequency of these hobbies significantly determines the cost of life insurance and whether a provider will accept your application.

How are high-risk life insurance rates determined?

When you apply for permanent or term life insurance, the insurer will ask a variety of questions about your lifestyle, medical history and family history before offering coverage. Whether you qualify for a policy and the rates you would pay will directly depend on your assigned risk level and health rating. These are determined during the underwriting process and, if required, a medical exam.

Each life insurance company has a similar rating system, although names for each category may vary. Overall, the higher the category you qualify for, the lower premium you will pay.

Life Insurance Rating Categories

  • Preferred select: Nonsmokers who are in great health with little to no family medical history issues.
  • Preferred: Nonsmokers who are in great health with a minor condition.
  • Standard plus: Nonsmokers who are in good health and may have a couple of minor conditions or have high blood pressure.
  • Standard: Nonsmokers with average health or have a family medical condition.
  • Preferred smoker: Smokers, or ones who have quit or smoke on occasion, who have great health and no family medical history.
  • Standard smoker: Smoker with good health.
  • Table rating: Separate category reserved for people who have below-average health or are considered a high risk to insure.

In the case of high-risk life insurance, rates are usually determined by the table rating system. These ratings are known as substandard insurance and have the highest costs for coverage.

With table ratings, the applicant gets a letter (A-P) or a number (1-16) that denotes the percentage above the standard premium amount that you would have to pay. Every letter or number down the table adds 25% to the standard premium. For example, if the standard premium is $100, then at a table rating of B, you would pay 50% above the standard rate, or a premium of $150. If you have a rating of 7, then you would pay 175% above the standard rate, or a premium of $275.

Although table ratings are the usual method of rate determination for high-risk applicants, each insurance company has its own way to evaluate your risk level. For example, one insurer may rate someone with high cholesterol as a table rating, but another insurer may offer that same person standard life insurance rates. This may be because the second provider is a specialist in policies for people who have high cholesterol.

Choosing the best high-risk life insurance policy

If you are looking to purchase affordable high-risk insurance, we recommend comparing quotes and policies from as many insurers as possible before purchasing coverage. This requires researching the insurance companies' underwriting policies to determine which carriers match up with your high-risk situation.

As we mentioned earlier, insurance companies tend to accept your application and give you affordable rates if they specialize in the type of high-risk life insurance that applies to your situation. Conducting your own research is highly valuable, as the difference between a standard and table rating could significantly increase your yearly premium by 25% or more.

If you are having trouble finding a life insurance company that will offer the policy you're looking for, we recommend reaching out to an independent insurance broker. Experienced brokers and agents can provide insight into which risks insurers will underwrite and can answer your questions. Furthermore, some high-risk insurance brokers may know exactly which insurance companies accept applicants with your risk profile.

Guaranteed acceptance life insurance

If you're unable to get standard underwritten coverage but need a policy, you should consider guaranteed acceptance life insurance. These life insurance policies require no medical exams or lifestyle questions, and rates are entirely based on your age, location and gender.

Since they're unable to determine an appropriate price based on your risk profile, life insurance providers offer quotes that are more expensive than standard life insurance and usually cap the death benefit at $25,000. However, you will not be denied coverage.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.