Life insurance is one of the most important purchases that you will ever make, but there are millions of people that don’t have the insurance protection that their family needs. Not having life insurance coverage is one of the worst mistakes that you could ever make.
If you have any type of adverse health condition, it can be somewhat challenging to qualify for life insurance coverage – especially if you’ve applied through the more traditional types of channels.
While you may have been turned down for life insurance in the past, the good news is that you may still be eligible for coverage. The key is to understand how to show the insurer that you are not a large potential risk.
What the Life Insurance Underwriters Look For in Determining Acceptable Risks
When determining whether or not an applicant for coverage is a good risk to take on, the insurer’s underwriters will look at a wide variety of factors. Even the best life insurance companies will turn away certain applicants, as it is likely that they will file a claim and present too high of a risk.
However, there are also many insurers that work with what are referred to as higher risk cases.
This means that these life insurance companies have provisions for those who have been diagnosed with various health conditions such as diabetes or irregular heartbeat and will accept such individuals for coverage.
Some of the most common criteria that all insurance companies look at prior to accepting an applicant for coverage include the following:
- Health history of the applicant’s family
- Marital status
- Smoking status and history
- Lifestyle / activities / hobbies
In addition, the underwriters will also consider the amount and the purpose of the life insurance that is being applied for. As an example, if the applicant for coverage is a 25-year old person who earns $20,000 per year but is applying for $1 million in life insurance coverage, it will likely raise a red flag.
For those who have any type of adverse health condition, the underwriters will typically request additional information that is specific to your health issue. This information may include questions pertaining to:
- When your condition was initially diagnosed.
- What specific diagnosis you were given.
- How your condition is being treated.
- What medications you are taking.
- How often you see your physician for your condition.
- Whether or not you have any other health conditions.
- What type, if any, testing you have had done that is related to your specific health condition and if so, what were the results of those tests.
It is also likely that the insurer will request a copy of your medical records and that you undergo some type of medical examination. Depending on your particular condition and the amount of life insurance coverage you are applying for, this exam may only consist of providing a blood and urine sample, or it may be more extensive.
There are policies where you do not need a medical exam, but you should try the examination life insurance first because you can get better rates if you qualify.
In addition, the underwriters will also want to get a clearer idea of the type of lifestyle that you lead. For instance, they will want information on whether or not you exercise regularly and whether you maintain a healthy diet, as this can have a bearing on how well you are controlling your health condition – and in turn, how much of an overall risk you are to the life insurance company.
How Life Insurance Premium Rates Are Determined
Once all of the information regarding your health condition and overall lifestyle has been compiled, the insurance underwriters can then make a determination as to whether or not you will be a good risk for the insurer to take on. If so, they will accept your application for life insurance coverage. In doing so, they will provide your policy with a rating.
This rating is considered to be the insurance company’s measure of the probability or the risk that the insurer will need to pay out a death claim on your policy within a certain period of time.
Life insurance companies usually have specific ratings categories for their policies, depending upon what type of risk a policy holder is considered to be. Most companies will include the following risk categories for their policies:
- Standard – When a person is categorized as a Standard rating, it means that they are considered to have an average life expectancy, and they are of average health, height, and weight.
- Substandard – Those who fall into a Substandard category are considered to have below average health due to various conditions. These individuals will typically pay a higher amount of premium due to the fact that they present a higher risk. There are oftentimes different levels of the substandard category, depending upon the severity of a person’s health.
- Preferred – The Preferred category is associated with those who are in excellent health. Those who fall into the Preferred category will usually pay a lower premium rate than those in the Standard category. There are generally more than one level of Preferred risk.
Oftentimes, even if an applicant is initially approved for coverage in a particular rating, they may move into a different risk category over time. For example, if an insured in the Substandard category substantially improved his or her health through proper diet and exercise, it is possible that they could move into a Standard rate class and lower the amount of premium that they pay for coverage in the future.
Likewise, a smoker who stops smoking for a certain period of time could also move into a better policy rate classification.
Life Insurance Table Ratings
In pricing their policies, life insurance companies often use what are referred to as table ratings. These ratings will allow the company to assess an insured further by the risk level that they present to the insurer.
In this case, rather than decline an applicant for coverage altogether due to a particular health condition, a table rating allows the insurance company to offer coverage, but at a higher amount of premium that is based on the person’s health.
As an example, if the applicant has a table rating of “A”, then they will pay the insurance company’s standard premium amount, plus an additional 25 percent. An insured who has a table rating of “G” – meaning that they have a more serious health condition – will be required to pay the insurance company’s standard premium rate, plus an additional 175 percent.
In most instances, table ratings are used with insureds who have specific adverse health conditions. If the health condition is deemed to be stable, then the insurance company will usually offer the person coverage and charge the premium rate that is associated with the appropriate table rating percentage.
Many of the best life insurance companies in the marketplace today will use table ratings. This is considered to be a much better alternative to providing coverage in lieu of declining coverage altogether for those with adverse health issues.
Finding the Best Life Insurance Companies with Adverse Health Conditions
For those who have adverse health conditions, finding the best life insurance companies for coverage can oftentimes be done through an agency or company that specializes in impaired risk. These professionals are typically much more familiar with the type of underwriting that is necessary for those who have been diagnosed with various conditions.
They are also knowledgeable about the different variables that different insurers will consider when they insure applicants based upon their various health issues – and they can therefore direct you to the proper carrier for the coverage that you need.
Our company specializes in working with impaired life insurance risks. We know which are the best life insurance companies to go to, depending upon the health issue that you have and the coverage you are seeking – and we can help you to find a policy that will also fit into your premium budget.
While your health condition may not put you in the most favorable light with many insurers, we can help you to present your case in a positive manner, and to move your application through the underwriting process quickly and efficiently.
How To Improve Your Chance of Life Insurance Coverage Approval
Even with certain health conditions, it is still possible to obtain good, solid life insurance coverage – and there are many ways to improve your chances of being approved through some of the best life insurance companies in the marketplace.
One way is to simply shop around. This is because all insurers do not view health conditions in the same light. In fact, in many instances, different insurance companies will oftentimes take very different views of certain conditions – and, although one insurer will deny an application altogether, another may offer coverage to the very same applicant.
With this in mind, it is important to never give up.
It is also extremely important to let the insurance company know that you are taking the necessary steps to control and / or to improve your condition. By eating right and exercising, you are essentially increasing your life expectancy – and this is viewed in a very positive light by life insurance companies, because this will make you a better risk.
You can also talk to your physician. In most cases, a life insurer will request your medical records prior to making a coverage decision. Therefore, if your doctor feels that you are successfully following your prescribed health plan, have him or her note that information in your medical records. By having these details in your file for the insurance underwriters to view, it can help your cause.
Even after you’ve been approved for life insurance coverage, if you can demonstrate to the insurer that you are continuing to improve your health, it is possible that your policy’s rating could be improved and your premium rate may be lowered over time.
Working with an impaired risk specialist is another way to substantially improve your rates.
These specialists know which companies are more likely to accept applicants with certain types of health issues, and can point you in the proper direction. This alone can save you an incredible amount of time and frustration when shopping for life insurance coverage.
One of the best ways of improving your chances is to cut out any tobacco that you currently use. If you’re listed as a smoker, then you’re going to be facing much higher premiums.
Smokers are at a higher chance for being diagnosed with severe health problems, which means you’ll be a higher risk to the insurance company. They are going to offset that risk by charging you higher monthly premiums. In fact, smokers are going to pay at least twice as much for their insurance coverage versus what a non-smoker is going to pay for the same sized plan.
Taking the Next Step
If you have an adverse health condition and you need life insurance, it’s not too late to apply for coverage – even if you’ve already been turned down in the past. By having a good understanding of what the underwriters look for, we can help you to get your application presented to some of the best life insurance companies in the industry.
It is important to investigate all of your potential options when applying for life insurance coverage. When you’re ready to obtain an instant life insurance policy quote, simply use the form on the side of this page to get the process started. If you have any additional questions or concerns, feel free to contact us directly at 888-229-7522 and we’ll be happy to help.