Life insurance for high-risk applicants

What makes you a high-risk life insurance applicant?

A high-risk life insurance applicant is someone who has health issues or lifestyle habits that make them riskier for life insurance companies to insure. Life insurance quotes are based on the applicant’s life expectancy. To determine your risk, insurers will often conduct a medical examination and consider factors like your job or hobbies. Skydivers who are also smokers will typically pay more than a desk worker who spends most of their downtime reading.

Medical risk

Your medical risk is one of the first things that insurers will consider. As part of the underwriting process, companies will typically ask for a health history, a list of current prescriptions you’re taking and sometimes a brief medical exam. They may also request a copy of your medical records from your healthcare providers. If you have any of the following conditions, you are likely considered high-risk:

• Cancer: A cancer diagnosis will usually put you in the high-risk category. For traditionally underwritten policies, many insurers will postpone offering coverage until you’ve been cancer-free for a set number of years.
• Heart attack: If you have had a heart attack in the past or have been diagnosed with heart disease, it will impact your ability to get life insurance. People who have had one heart attack are often at risk of having another, which poses additional risk for the insurance company. If you’re approved for coverage, chances are you’ll likely receive a table rating, which we’ll explain shortly.
• Stroke: A history of strokes, a recent stroke, or one that has led to complications like paralysis can make it hard to buy life insurance.
• HIV/AIDS: Even if you’re treating HIV/AIDS, a diagnosis will land you in the high-risk pool because studies have shown that people with these diseases have shorter life expectancies than average.
• Kidney disease: Kidney disease is a chronic condition often requiring routine medical maintenance. In addition, complications can include stroke and other issues that contribute to your overall risk.
• COPD: Also known as chronic obstructive pulmonary disease, this condition is caused by airway damage and can make it difficult to breathe. Impacting more than 14 million adults in the United States, this condition can significantly impact medical treatment costs and life insurance risk.
• Poorly managed conditions: Any poorly managed condition, no matter how minor it seems to start with, can impact your medical risk. High cholesterol, diabetes and sleep apnea are all relatively common and treatable but can lead to further health issues if not maintained carefully.

Many health conditions may contribute to your medical risk when it comes to acquiring (and paying for) life insurance. However, having a chronic condition is not the only factor that will contribute to calculating your rate, so keep this in mind.

Lifestyle

Your lifestyle can also impact your risk. Some jobs can put you at higher risk of injury and death and many hobbies also involve danger, so insurers will ask questions about how you spend your time.

• Occupation: Your job plays a big role in how insurers view your risk of death. Some jobs face a much higher risk than others. In 2022, logging workers saw the highest fatal injury rate at 100.7 per 100,000, according to the Bureau of Labor Statistics. Farming, fishing and forestry occupations had the highest fatality rate of all occupational groups.
• Hobbies: If you consider yourself to be a thrill seeker, you are most likely in the high-risk category. Insurance companies want to know if you participate in potentially dangerous hobbies like scuba diving, mountaineering, skydiving and motorcycling.
• Nicotine use: Smokers typically have more health risks and might be more likely to develop lung conditions like COPD or cancer. Life insurance companies will ask if you smoke cigarettes, use a vape pen or chew tobacco. If so, you’ll probably pay more for life insurance as a smoker. Note that some companies might test for nicotine and cotinine as part of your medical exam.
• Alcohol consumption: If you drink more alcohol than what is considered moderate drinking (two drinks per day for men and one for women according to the CDC), life insurance companies may consider you to be high-risk. Overconsumption of alcohol can trigger other health complications, such as liver damage.
• Driving habits: If you tend to rack up speeding tickets or other driving violations, consider yourself warned — this can impact your life insurance costs in addition to your auto insurance premiums.

How do high-risk life insurance rates work?

When determining how much to charge, life insurance companies categorize applicants based on their risk. Companies use different processes to calculate consumer risk, so if you find yourself to be a “riskier” client based on the criteria above, you’ll especially benefit from shopping your rate among multiple insurers. Not every company uses the same classes during the underwriting process, but it’s common for life insurance companies to place applicants in one of the following categories:

• Preferred select or preferred plus: This category is for the lowest-risk applicants who are in good health, have a safe job and hobbies, and don’t have bad habits, such as drinking too much alcohol, or a family history of genetic disease.
• Preferred: Preferred applicants are typically healthy individuals who may have one or two marks against them. For instance, they may have a minor medical issue or a slightly risky hobby.
• Standard: This is the base class. Individuals typically start here and based on their application, get a better classification if healthier (less risky) than average or get moved down a class if they are seen as riskier than average to insure.
• Substandard: If you’re riskier than the average person in your age group, you may be assigned a substandard risk class such as a table rating.
• Preferred tobacco: Some smokers — and sometimes former smokers — will land in this category if they may have otherwise qualified for a “preferred” rate.
• Standard tobacco: Many current cigarette smokers, if they have risk factors in addition to their tobacco use, will typically fall into this category.

Table ratings and flat extras

Not all individuals will fall into common risk classes. In an effort to insure as many people as possible, many insurers offer coverage options for those considered to have “substandard” risk. Table ratings and flat extras are two methods that insurance companies use.

Table ratings

Table ratings begin with a standard rate and then incorporate risks at varying percentages (usually denoted by an alpha or numeric code) to determine your annual rate, similar to the example table below.

Remember, not all life insurance companies calculate risk using the same factors or weighting system. For instance, a chronic health condition may impact your rate at the 200% tier with one company but only the 150% tier with a competitor. The table above is for illustrative purposes and your life insurance premium may be higher or lower.

Flat extras

“Flat extras” are another way of calculating life insurance costs, and they, too, vary by insurance carrier. Under this method, the premium is increased by a specific dollar number per $1,000 of life insurance. For instance, if you apply for $500,000 in coverage and you’re assigned a $5 flat extra, you’ll need to pay an extra $2,500 (5 x 500) per year on top of your base policy cost.

A flat extra can be temporary or permanent, as determined by the insurer. For instance, if a customer who previously used a motorcycle gave up the hobby and started commuting by car, the “flat extra” associated with this risk factor may be eliminated from their policy.

It’s possible that insurance companies may apply both a table rating and a temporary flat extra for certain conditions.

How to find high-risk insurance

Though every insurer is different, someone considered “high risk” may or may not fall into the table rating or flat extra system. Not all insurance companies are willing to provide coverage to those in a substandard risk class. This is one reason why shopping around and comparing quotes is beneficial.

In the worst case, you may not be able to find an insurer who is willing to offer you traditional life insurance coverage, such as term life insurance. If that happens, you can consider applying for guaranteed acceptance life or accidental death insurance coverage. These policies require no medical exams or lifestyle questions, and rates are typically solely based on age, gender and location. However, they’re usually very expensive and may have a waiting period before your beneficiaries can access the death benefit. Consider working with a licensed life insurance agent to find a carrier if you struggle to find insurance.

Frequently asked questions