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Life Insurance for High-Risk Applicants


Updated: Nov 7, 2023
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You'll likely encounter higher premiums and potentially limited policy choices if you're labeled as a high-risk applicant in the life insurance landscape. This designation comes from various factors such as existing health conditions, engaging in high-risk hobbies or working in hazardous occupations. Understanding what contributes to a high-risk status can help you better prepare for the financial implications and help you explore your insurance options more effectively.

Key Takeaways

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Being a high-risk applicant often results in higher premiums and limited policy options.

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Various factors like health, occupation and lifestyle contribute to high-risk status.

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High-risk applicants can still find coverage through careful planning and consultation.

Life Insurance Risk Factors

Understanding the elements contributing to a high-risk status in life insurance is key to making informed decisions. These factors not only influence your eligibility but also directly affect the cost of your premiums. Below are some of the most common risk factors:

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    Medical and Health Risks

    Chronic conditions like diabetes, heart disease or cancer can substantially impact your premiums. Insurers often view these medical issues as indicators of a potentially shorter life expectancy, which in turn elevates your risk profile. For instance, a recent diagnosis of a severe health condition could lead to significantly higher premiums compared to someone without such issues.

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    Hobbies

    Activities such as skydiving, scuba diving or mountain climbing can make insurers cautious. These hobbies are statistically more likely to result in accidental death, which can lead to higher premiums.

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    Occupations

    Jobs with inherent risks, like construction, commercial fishing or law enforcement, can also make you a high-risk applicant. Insurers assess these occupations based on historical data and accident rates, which can result in higher premiums. For example, a construction worker might face higher premiums due to the elevated risk of workplace accidents.

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    Lifestyle Choices

    Personal habits such as smoking or excessive drinking can also place you in the high-risk category. A smoker, for example, can expect to pay more in premiums than a non-smoker. Similarly, someone who engages in heavy drinking might also face higher premiums, as insurers consider these lifestyle choices as factors that could potentially shorten life expectancy.

Life Insurance Risk Classifications

Insurance companies categorize applicants into different risk classifications to determine eligibility and premium rates. These classifications are based on a various factors, including health status, lifestyle choices and occupation. Below are some of the most common risk classifications:

  • Preferred Best: This classification is for the lowest-risk applicants who have excellent health and engage in no risky behaviors. These individuals are rewarded with the most favorable premium rates.
  • Super-Preferred: Applicants in this category have minimal risk factors but don't quite meet the criteria for the "Preferred Best" classification. They still enjoy relatively low premiums.
  • Preferred: This category is for individuals who are generally healthy but may have some minor risk factors, such as elevated cholesterol levels. Premiums are competitive but not as low as the top two categories.
  • Standard: Applicants with moderate risk factors fall into this category. These could include mild health conditions or occupations that carry some level of risk. Premiums are generally higher compared to the Preferred category.
  • Substandard or Rated: This is the classification for high-risk applicants. Factors such as severe health conditions, high-risk occupations or risky hobbies can land you here. Premiums are typically higher, reflecting the increased risk.

Cost of Life Insurance for High-Risk Applicants

The cost of life insurance is notably higher for high-risk applicants compared to those with standard or lower risk profiles. This is primarily due to the increased likelihood that the insurance company will need to pay out a death benefit in a shorter time frame.

Various factors contribute to this higher cost, including the applicant's age, the chosen type of policy and the severity of the risk factors involved. For instance, older applicants or those choosing whole life policies may find the cost to be higher. Additionally, the more severe the risk factors—such as serious health conditions, high-risk occupations or risky hobbies—the higher the premiums will generally be.

Understanding these contributing elements can help high-risk applicants better prepare for the financial commitment involved in securing a life insurance policy.

How to Get Life Insurance for High-Risk Applicants

While obtaining life insurance as a high-risk applicant may present some challenges, knowing the steps to take can help you navigate the process more smoothly and find a policy that suits your needs. Here are some key steps to consider:

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Consult an Independent Agent

Although optional, working with an independent insurance agent can give you a broader view of the market. They can help you compare policies from multiple providers to find one that aligns with your specific risk factors and financial situation.

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Consider No-Exam Policies

If you're finding it difficult to get approved for traditional policies, no-exam life insurance might be an option. While these policies often come with higher premiums, they can be easier to qualify for, especially if you have significant health issues or other high-risk factors.

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Be Honest on Your Application

Transparency is crucial when applying for life insurance. Make sure to disclose all relevant information about your health, occupation and lifestyle. Omitting details or providing false information can lead to complications, including the possibility of policy cancellation.

Tips for Affordable Life Insurance

You can employ several strategies to find a policy that won't break the bank. Here are some actionable tips to consider:

  • Improve Your Health: Taking steps to better your health can positively impact your insurance premiums. For example, if you manage to lower your cholesterol levels or quit smoking, you may move into a less risky classification, which generally comes with lower premiums.

  • Choose Term Over Whole Life: Term life insurance policies are often more affordable than whole life policies. They provide coverage for a specific period, such as 10, 20 or 30 years, and don't include a cash value component, making them less expensive. If you're a high-risk applicant, this could be a more feasible option for you.

  • Bundle Policies: Some insurance companies offer discounts if you purchase multiple types of insurance through them, such as auto, home and life insurance. By bundling these policies, you could receive a discount on your life insurance premium, making it more affordable in the long run.

Frequently Asked Questions About Life Insurance for High-Risk Applicants

Below are some common questions about life insurance for high-risk applicants. By understanding these aspects, you can make informed decisions and find a life insurance policy that best suits your needs as a high-risk applicant.

About Melissa Wylie


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Melissa Wylie is a Content and SEO Manager at MoneyGeek. Melissa has worked in the financial content space since 2018 and has spent much of that time focused on all things small business.

Prior to joining MoneyGeek, Melissa held SEO positions at Bankrate and LendingTree. Melissa’s work has also appeared on LendingTree-owned websites ValuePenguin and MagnifyMoney.

Melissa began her career at American City Business Journals in 2015 as a reporter for the company’s women-focused publication Bizwomen. Melissa has a Bachelor of Arts in Journalism from the University of North Texas. Melissa relies on her foundation in journalism to craft content that simplifies complex financial topics to help everyone feel confident when making decisions with their money.

Melissa's other work can be read on LendingTree and Bizwomen.