“Impaired Risk” simply refers to the elevated risk a life insurance applicant demonstrates due to medical issues, or occasionally other risk factors.
Life Insurance with Health Impairments
The most common type of impaired risk life insurance is for medical reasons. So if a 47 year old man has a history of heart disease and was treated with a triple bypass surgery, that would be an impaired risk.
The reason it’s important to use an independent life insurance agent who specializes in impaired risk cases is so you deal with an agent who knows where to place your case.
Most people, when shopping for life insurance, make the first call to their local insurance agent, who probably specializes in home/auto or business insurance, NOT life insurance.
This agent will have no success trying to write a life insurance case with a high risk medical history, not because he or she is incompetent, but this agent simply does not have the required experience to place a tough case.
Try telling your local Farmers Insurance agent you are 6’0 and weigh 280 pounds, and take insulin for diabetes. He’ll probably tell you he can’t help you.
Or try calling your State Farm agent to see what the cost of life insurance is with multiple sclerosis, or after having a kidney transplant, or if you smoke marijuana. He might laugh at you.
And yet, we help individuals with impaired life insurance needs obtain coverage like this every day at Huntley Wealth Insurance.
How Much Does Life Insurance Cost with Medical Problems?
Your life insurance premiums will depend on the severity of your health impairment, your age, gender, and then of course, the amount and type of coverage you are applying for.
But generally speaking, the cost of impaired risk life insurance depends more importantly on what type of policy you are able to qualify for. I recommend my clients try to approve for the cheapest type first (duh), and then if my client can’t qualify for that, move on to the more expensive alternatives.
The four types from most affordable to most expensive are traditionally underwritten life insurance, simplified or jet issue life insurance, graded death benefit, and guaranteed life insurance.
Traditional Coverage – Simplified Issue / No Exam – Guaranteed Issue
- Traditionally Underwritten Life Insurance – Unlike income protection insurance, requires a medical exam and application with full medical disclosure. The insurance company will also access your motor vehicle report, MIB report, and all relevant medical records. Since the insurance company knows just about every detail about your health in this type of underwriting, if they can make an offer to you, it will most likely be more affordable than the next two options.
- Simplified Issue – This is sometimes referred to as jet issue, or no exam insurance. In this type of underwriting, a medical exam is not required. The company may still have a lengthy application forcing you to reveal every health detail about your history, and they’ll check your answers against an MIB report and pharmacy report they’ll pull on you, but they won’t make you take a medical exam. Sometimes, no exam policies are good for people with minor health risks, as the underwriting is quicker and simpler.
- Graded Death Benefit – These policies won’t require a medical exam either, and the applications are noticeably shorter than options 1 and 2. For example, you may only have to answer a half dozen medical questions. As long as you can answer No to their questions, you qualify. This type of policy generally costs significantly more than options 1 and 2, because typically only people who can’t qualify for the first two options would apply for graded death benefit life insurance.
- Guaranteed Issue – No medical questions on the application. No health exam. Just about everyone qualifies, even if you have been diagnosed with a terminal illness. It’s called guaranteed for a reason. For people with severe health impairments, guaranteed issue may be their only option. It is the most expensive of the four.
Perhaps You are “Impaired Risk” Due to Lifestyle Reasons
There are non-medical reasons some people may be classified as “impaired risk”. These would include, but are not limited to, working in a dangerous occupation, participating in hazardous activities, or traveling outside of the United States.
How to Get an Impaired Risk Quote
If you have a medical condition, call us with the details, and we’ll shop your case out for you. We know which companies are the most lenient on which medical risks, so your best chance of finding affordable coverage is using Huntley Wealth Insurance. For a personalized quote based on your health condition, call us at 877-996-9383.
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