What options are available to you for life insurance if you have health issues or participate in hazardous sports/activities. If you have difficulties qualifying based on health, there is a secondary market of high risk insurance plans that might be a back-up option. Let's take a look at how they work.

First, how do we know if the standard term life plans are probably not an option? The answer is health class. Take a look at our term life health class page and list of requirements. If you find your health status or history does not fall within at least the "Standard" health class for one or more criteria, then the standard plans may pose a problem. Feel free to run your status by us. Take advantage of our experience and guidance as professional term life insurance agents.

So what are high risk insurance policies? The are essentially simplified issue plans that offer a limited benefit with other restrictions. They tend to be whole life in design. The whole life design makes sense with such a risky proposition to the insurance carriers for the same reason we generally don't recommend it for standard issue policies. Whole life policies are front loaded much like a mortgage is to a bank with an increased premium going to the carrier. The insurance company can quickly collect enough with investment on the premium to offset the increased likelihood of having to pay out a claim. This is usually not a good value when compared to term life insurance as we discuss in our term versus whole life article but we may not have any choice if health dictates a high risk direction.

What are some elements unique to high risk insurance plans. Aside from the whole life nature mentioned above, there are other constraints. First, the premium will be higher. That's both a a function of higher risk and the whole life design. The lower amount of coverage offered should offset this partially. In general, most high risk policies function similarly to Final Expense life insurance plans in that they are not large amounts relative to standard term life which can quickly approach $500K for a fairly low amount. There can be constraints on how quickly the benefit can be triggered i.e. not during the first year of the purchase. The application and enrollment process is usually easier and may even preclude the need for a paramedical exam.

For some people, high risk insurance coverage may be the only option and for this reason, it has a place in the market as a back-up option. Please email us if you think this is most likely your available option and we'll provide a quote for you. We know the carriers and their particular underwriting kinks so we may be able to address your needs and health status with a standard plan. If not, we can investigate if a high risk policy is the only option to look at.