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Risk factors in life insurance

What are the "risks" assessed by life insurance companies that can affect your premium?

Insurers consider many different factors when determining how much you should be paying in premiums. High-risk applicants are people who have an increased probability of death or disability due to aspects of their lifestyle or health. Factors that could make you considered “high-risk” include:

  • Pre-existing medical conditions like heart disease.
  • Sports, occupations and activities that are dangerous.
  • Lifestyle habits such as smoking or drinking alcohol

Factors that influence your risk

During the life insurance application process, the provider will collect as much information about you as possible in order to set your premiums accordingly. Here a few of the main details regarding your health that they’ll shine a light on:

1. Overall health and pre-existing medical conditions

Your health and lifestyle are the main factors that insurers will evaluate. When you apply for life insurance, the insurer will provide a medical questionnaire for you to disclose any existing or past conditions that you may have suffered from, plus, any treatment you’re undergoing or have had. Failing to disclose any relevant information can let the insurer cancel your policy without refund or deny a future claim.

Pre-existing medical conditions will be addressed in one of three ways:

  • The policy offered will have an exclusion for the pre-existing condition.
  • The condition may be covered, but you’ll have raised premiums.
  • They can decline to insure you.

Some policies may require you to have a complete medical or physical check-up to be eligible — especially if you have pre-existing conditions. The purpose of this exam is to make sure that no condition is overlooked and to verify the status of your health and wellbeing.

2. High risk activities

Are you into skydiving, bungee jumping, motorcycles, extreme sports or any other dangerous hobby? Your life insurance company might see your pastime as an expensive accident waiting to happen. High risk hobbies are a distinct risk factor and many policies will flat-out exclude specific pastimes. You might find a provider to insure you, but at an extra cost that could be expensive.

It should be noted that there are niche companies that specialize in providing coverage for thrill-seekers.

3. Occupation

Occupations are assessed based on the nature of the work and perceived level of risk. Jobs including agriculture, fishing, mining and construction are seen by insurers as having an increased risk of death or injury and result in higher premiums.

However, the insurance company will consider the work relating to your specific role. For example, if you work in the mining industry, but work in administration, you can ask your provider to review your premiums based on the reduced level of risk.

4. Lifestyle factors

Smoking, heavy drinking or recreational drug use can all be considered high to insurance companies. Higher premiums are directly related to any lifestyle factors that come with increased medical costs, or a raised chance of disability or death. To get a detailed view of your health, the insurer will ask about:

  • Any medications or prescriptions that you’re taking regularly
  • Alcohol consumption and other drug use

On the other hand, someone in great shape with a healthy lifestyle may be eligible for discounts, reduced premiums and other bonuses from insurers. Some lifestyle factors can be determined through medical testing, blood tests, BMI calculators and other methods. It’s important to keep in mind that a non-smoker is someone who hasn’t smoked for more than 12 months.

How are life insurance premiums impacted by smoking?

Are there high-risk life insurance companies?

Yes. Not every life insurance company assesses applicants the same way. Some companies may refuse to provide coverage to high-risk individuals, while others are willing to insure risky applicants despite hazardous occupations, hobbies, medical conditions or lifestyles. Be aware that you may have costly premiums or certain exclusions in your policy if you’re assessed as high risk.

Life insurance companies that might be able to help you find coverage

Name Product Issue age Minimum Coverage Maximum Coverage Term Lengths Medical Exam Required
Policygenius - Life Insurance
18 - 85 years old
10, 15, 20, 25, 30 years
Depends on provider and policy
Compare 12+ top insurers side-by-side to get the best possible deal, and shop return of premium policies online.
25 - 60 years old
5, 10, 15, 20, 25 and 30 years
Compare 40+ insurers and apply online to get the lowest possible price — no medical exam required.
Everyday Life
18 - 70
10, 15, 20, 25, 30, 35 and 40 years.
Ladder multiple life insurance policies to save on the coverage you need for all your debts.
JRC Life Insurance
18 - 85 years old
10, 15, 20, 25, 30, 35, 40 years to lifetime/age 121
May be required
Compare policies up to $10 million from 45+ top insurance companies with the click of a button.
Nationwide life insurance
18 - 80 years old
10, 15, 20 and 30 years
Get term, whole, universal or no-exam life insurance with up to $1 million in coverage.

Compare up to 4 providers

Can an insurance broker help?

Life insurance advisers can use their knowledge of the industry to help potentially risky applicants find providers that are willing to cover them at a reasonable rate. Based on the risk that the applicant carries, the adviser can find insurers willing to provide coverage or tailor the policy around the risk.

Steps to get life insurance as a high-risk applicant

Even risky candidates can get insured, it just takes a little know-how when it comes to finding a policy that’s flexible and can meet their needs. By following these few tips on how to balance costs and benefits, you should be able to find a policy that works for you:

1. Know your risk profile

Your risk profile revolves around on how likely you are to make a life insurance claim before the policy expires. Dangerous occupations and hobbies naturally raise the chances of something unfortunate happening. To find a policy that fits your needs, list all your lifestyle factors, occupational hazards and dangerous pastimes, and then consider how these are handled by different providers.

These factors have a big impact on your premiums and being aware of them can help you find ways to reduce costs.

2. Compare policies

Once you know what kind of terms you want, you can start comparing insurers and different policies. You could also explain your requirements to an insurance broker and have them do the legwork. Compare as many policies possible in order to find the most fitting among them.

3. Read the fine print

Before settling on a life insurance policy, make sure you fully understand all the terms and conditions. You should not sign up without knowing about:

  • Exclusions. The things not covered or situations where life insurance will not pay out
  • Benefits. This is how much will be paid in the event of a claim. Avoid overlap with other forms of insurance where possible.
  • Extras. These can be built into policies at an additional cost. It could include income protection, critical illness insurance, funeral benefits, increased benefits for accidental death or other features.

Tip for getting lower life insurance premiums

If you’ve found a policy that covers you for high risk activities or lifestyle factors, then it’ll typically come at a higher price than other life insurance policies. This means you should try to save some cash by looking for discounts or taking advantage of other strategies that could bump down your insurance premiums.

  • Consider not getting coverage for a dangerous job. Life insurance covers you around the clock, while workers compensation only pays out for mishaps while on the job. If you have a high risk occupation, you could deliberately get it excluded in order to lower premiums and rely on workers compensation instead. Remember to check how workers comp operates in your state before going without coverage for your job.
  • Exclude a risky hobby. This can be a particularly good idea if you hold separate insurance, like a specialized health policy, to protect you while performing these activities.
  • Take advantage of discounts. Insurers may offer discounts for signing up online, holding multiple policies with them or signing up if you already have family or friends holding policies with that insurer. Because these discounts are typically applied as a percent, the more you spend, the more you save.
  • Proactively manage your risk factors. Being a smoker with a slow lifestyle might mean your viewed as an even more extreme risk than someone with a dangerous job. Taking steps to address health issues and change your lifestyle isn’t always easy, but there are big financial, and medical, benefits to doing so.

What happens if I don’t tell my insurer everything?

If you lie, mislead or fail to be entirely honest, your insurer can cancel your policy without a refund. Even worse, they might use this as grounds to reject a claim even though you’ve paid premiums the entire time. You might be able to lower your premiums by fudging the truth, but it puts your entire policy at risk which defeats the purpose of even having insurance.

When it comes to getting high risk life insurance, honesty is the other best policy. Research and comparing quotes will help you find a life insurance policy that’s right for you.

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