High-Risk Life Insurance: Cost, Selection, Where To Get It

High risk life insurance is a type of life insurance policy the covers people with higher risk of death. Due to the higher risk of death, there is a higher premium for high risk life insurance.

Higher risk of death may be a result of a number of things.

  • Obesity
  • Heart disease
  • Genetic disorder
  • Risky occupation
  • Risky hobies

Let's go into more detail what high risk life insurance is, its cost, and how to get insured. The best age to get life insurance is around age 30 because your life gets much more complicated after.

What Is High-Risk Life Insurance?

From the life insurer's point of view, each life insurance applicant is evaluated based on his or her health. Based on the results of the evaluation, a life insurance policy is granted based on a set premium. At the end of the day, a life insurance company is a business that is looking to make a profit. It cannot mis-price its policies if it wants to stay in business.

Risk factors are a part of life. The higher the risk factors in a life insurance application, the higher the premium and vice versa.

The ideal life insurance candidate is one who never dies because he or she is in perfect health and never gets into an accident. The reality is, accidents and deaths from illnesses happen. A life insurance company must carefully evaluate and price accordingly. If there is a death, a life insurance must pay the death benefit claim.

The worst thing that can happen for a life insurance company is if someone takes out a life insurance policy and dies the next day.

From an individual perspective, it is best to take out life insurance when you're young so you can lock down a low premium. You want to get life insurance BEFORE you need life insurance. People need or start considering life insurance when they get injured, get an illness, take on a huge mortgage, and/or have children.

During a global pandemic, more people are inquiring about life insurance as well just in case they die from the coronavirus. The key to life insurance is getting an affordable life insurance policy before you really need it.

High-Risk Life Insurance Classifications

Here are the conditions that classify someone for high risk life insurance.

High-Risk Health Conditions

Not all health conditions are equal risks. For example, some health conditions are either temporary or well-controlled with medications or other therapies. Some conditions cannot be easily controlled because of the patient or know effective medication.

Depending on the health condition level, premiums will be adjusted accordingly. Below are some examples of controlled high or higher risk health conditions:

Here are some examples if high-risk health conditions that would result in much higher premiums:

High-Risk Occupations Count Too

Perhaps you are reading this article from the comfort of an office or home office. The reality is, there are millions of non-white collar jobs that have higher risk.

Examples of higher-risk occupations include:

  • Deep see fishermen (tuna, crab, lobster, etc)
  • Loggers
  • Airline and fighter jet pilots
  • Miners and oil workers
  • Iron and steel workers
  • Construction workers
  • Tree trimmers
  • Roofers
  • Gutter cleaners
  • Transportation workers (due to coronavirus)
  • Truckers

The good thing about working in a higher-risk occupation is that your company will usually provide more generous company-provided life insurance at a lower rate.

When I worked in finance, I had to travel a lot to see clients. I was on a plane once or twice a month on average for 13 years. The company automatically provided for 3X my base salary in life insurance for free. I elected to get 5X my base salary in life insurance coverage for a nominal fee.

If you are in a high risk occupation, definitely ask your company about its life insurance and other benefits!

High-Risk Behaviors Are A Factor

Your behavior makes a difference in whether you can get life insurance and how much you will have to pay for it.

Here are some common high risk behaviors you will be asked to reveal in the life insurance application:

Do you smoke or vape?

No matter what tobacco companies, its lobbyists, and vape companies like Juul say, smoking and vaping are not good for your lungs. When you add on the fact that COVID-19 attacks the lungs, life insurance companies won't view smokers and vapers kindly.

Smoking can increase your life insurance premium by as much as four times that of a non-smoker. We're talking a non-smoker paying $35/month for a $750,000, 10-year term policy to now paying $140/month. That’s a big jump! Smoking and vaping is linked to lung cancer and shorter lives.

Don't smoke if you want a lower premium. Don't chew tobacco either.

Do you do drugs?

Not all drugs are same. If you smoke marijuana that's better than injecting yourself with crack. However, smoking marijuana is still smoking. If you do do drugs, your medical records and/or urine test will reveal that you have or are.

Therefore, if you want affordable life insurance, it's best to stay CLEAN from drugs for at least two months before going in for a medical exam. You can't escape the results of blood work and urine examination.

If it shows that you used illicit drugs from years ago, you are probably eligible for a low life insurance premium rate if you are no longer doing drugs and are in great health. However, any indications that illicit drug use has been recent, and your premiums will be high or you may even have your application declined.

Do you drink alcohol?

Drinking alcohol in moderation is fine. However, if you abuse alcohol then you will be categorized as higher risk. Alcohol abusers tend to drive drunk more, take more drugs, and do more dangerous things.

Your driving record is carefully considered when applying for life insurance, so be aware. Life insurance companies will check with the DMV for any incidences of DUI or DWI in your past. If such incidences occur with the last five years, you will pay higher life insurance premiums.

Are you a bad driver?

Of course you're not going to say you are a bad driver, but your driving record is public and doesn't lie.

An occasional moving violation or at-fault accident once a year or two may not be an issue. But if you are a repeat offender with violations within a six month period, and/or have a history of at-fault accidents, you will either be charged a higher premium, or face the possibility of a decline of your application.

Do you travel to dangerous locations on a regular basis?

Do you regularly go to Kabul, Islamabad, Tehran, and Pyongyang for business or pleasure? If so, you may pay for higher life insurance premiums due to the higher risk of kidnapping and murder of foreigners.

The U.S. Department of State issues advisories on travel to virtually every country in the world. There are different ratings, but some countries are listed as “Level 4: Do Not Travel”. Check the out. Even China is now on the list due to COVID-19.

Are you a thrill-seeker?

You may bee asked whether you do one or any of the following:

  • Skydiving
  • Paragliding
  • Piloting private planes
  • Scuba diving
  • Motorbiking
  • Surfing
  • Mountain climbing
  • Backcountry skiing

Each company may have its own designated list of hobbies they consider to be high risk, and worthy of a higher premium.

High-Risk Life Insurance: Cost, Selection, Where To Get It

If you've done some of these higher risk activities once, you shouldn't consider any of them as hobbies. Life insurance companies are looking for people who regularly engage in risky hobbies.

For example, I used to ride a motorcycle 10 years ago. I wouldn't say that I ride motorcycles in the application today. I went scuba diving in Mexico twice. But that was six years ago. Life insurance companies want to know what high risk activities are you doing today. That's only fair.

What Type Of Life Insurance To Get As A High-Risk Person?

There are many different types of life insurance.

The two types of life insurance you need to be aware of are: term life and permanent life (whole life).

The key difference between the two is that a permanent life insurance policy not only provides a death benefit but also a cash value. Due to the cash value, the policy holder has to pay a higher premium. Whereas a term life policyholder only pays for the death benefit.

In general, it's better to get term life because it's cheaper. Given you are already a high-risk person, your premiums will be higher than a low-risk person. If you get a permanent life insurance policy, it will probably be unaffordable to most.

Below is an example of a Universal Whole Life (permanent life) insurance policy. The death benefit is $1 million and costs $958 a month. If the 42-year-old male were to get a term life insurance policy with a $1 million death benefit over 30 years, the cost would be closer to $300 a month. The difference is huge.

High Risk Life Insurance: Cost, Selection, Where To Get

Final Expense / Burial Life Insurance

If you have multiple risk factors that you’re unable to mitigate with any of the strategies above, you can still get final expense life insurance or guarantee issue life insurance. Final expense life insurance covers expenses associated with death, such as a funeral. These policies tend to be small – no more than $25,000. They are also much easier to get because the relative cost is higher.

Best Way To Get Life Insurance As A High-Risk Candidate

You can absolutely get life insurance as a high-risk candidate. There are plenty of massive life insurance companies that will happily work with you.

The easiest way to find one is to apply on PolicyGenius, the #1 life insurance market place where qualified insurers compete for your business.

Not all insurance companies rate risk factors on the same level. Some even specialize in certain high-risk niches, and will typically be the most affordable.

This is why apply for free for life insurance on PolicyGenius is so helpful. They tailor your application to insurance companies most appropriate to your situation. The results you see means these life insurance companies will want to cover you. It's then up to you to choose the most appropriate policy.

Is High-Risk Life Insurance Needed?

If you are considered high-risk, then you should probably get life insurance. Most people with term life insurance policies DON'T have their policies pay out because most people don't die before their term runs out. Life insurance companies are so profitable and so big due to this very reason.

You also don't want your death benefit to pay out because that means you did. However, if you are in a high-risk occupation or have health issues and want to protect your loved ones, then getting life insurance is a no brainer.

The key is to find affordable life insurance to make it worth it. Since so many people are in the high-risk category, there are many more insurance companies specializing in each of the specific risk factors.

Once again, I highly recommend applying for life insurance on PolicyGenius to find the most affordable and most appropriate life insurance policy for you. I've met the founders multiple times since its founding and I am impressed with what they've build to help consumers.

About the Author: Sam worked in investment banking at Goldman Sachs and Credit Suisse for 13 years. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. He spends time playing tennis, taking care of his family, and writing online to help others achieve financial freedom too. He started Financial Samurai in 2009 and has grown it to be one of the largest independently owned personal finance sites in the world.