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Answers to High-Risk Life Insurance Questions

If you have ever purchased a life insurance policy or even just researched the requirements to start the process, you probably had many questions along the way. Obtaining life insurance can be a difficult endeavor with numerous challenges that arise when going through prequalification and underwriting, which we discussed in Parts One and Two of this series. Let’s take a look at some of the most common questions asked by people who want to buy life insurance but are considered high-risk or who have needs that require special handling.

1. Which Company Takes Higher-Risk People?

There is no one company that specializes in higher-risk candidates. Dozens of top-rated carriers, such as American General, John Hancock, MetLife, Prudential and others specialize in underwriting certain types of risk. Your agent or advisor should know which companies like which risk and build strong connections with them so your application has the highest chance of success. 

2. Which Company Is Right For Me?

Being prequalified through personal interviews as well as any necessary medical records will help determine the right company for you. Every underwriting risk you pose will be identified so you are aware of potential challenges at the outset of the process.

Based on your prequalification, your agent or advisor will identify the carrier or carriers that would be most competitive for you and provide you with a summary of rates the market has to offer along with their recommendation of the carrier with whom you should apply. (For related reading, see: How to Shop for Life Insurance.)

3. Will I Then Be “Pre-Approved” for Coverage?

No. There is no such thing as pre-approval in life insurance underwriting. You receive official approval only after you submit a formal application and go through underwriting. What prequalification does offer is a quoted rate for which you will be approved. You can submit a formal application confident of the outcome.

4. Can Anyone Get Life Insurance?

There are few things in life that are guaranteed, and unfortunately, some people are simply not insurable. Whether it’s severe organ failure, a hard drug habit, or other extreme medical, lifestyle, legal or financial risk factors, there are certain risks insurance companies are not willing to take. But these cases are few and far between. The vast majority of people are eligible for coverage immediately.

5. Will I Have to Pay a High Premium Because I'm Considered Higher-Risk?

Not necessarily. The key is finding a carrier with a high degree of comfort in underwriting the particular risk you represent. Because of their level of expertise, they may not consider you a very high risk at all. Often, people get charged exorbitant rates because they apply with a company that does not specialize in their risk. Once you choose the right company for you, the underwriting becomes much more intuitive.

(For more from this author, see: The Blunt Truth About Marijuana and Life Insurance.)