High Risk Life Insurance Coverage
High risk life insurance coverage is the cover that’s available to people in apparently dangerous occupations. Such careers will include flying instructors, racing car drivers and salvage divers. It takes into account also those who have existing illnesses that are seen as potentially fatal – the likes of cancer, motor-neuron disease and asthma.
Asking whether or not high risk life insurance coverage is difficult to obtain requires simply a reminder that, from the underwriter’s point of view, all insurance is a matter of risk assessment. If, for example, you’re at death’s door with problems from congenital diabetes you’ll be none too welcome without paying an exorbitant rate, whereas if you have simply Type 2 – otherwise known as age on-set – diabetes, treatable by just a daily tablet before breakfast, then you’ll be a risk, yes, but a low level one. The cover accord under the greater risk category is what’s called an “impaired risk” policy (as distinct from a standard risk) and comes with markedly higher premiums.
Most insurance companies that underwrite high risk life insurance coverage these days have become more enlightened, almost sophisticated, in their assessments. Their data on medical treatments are more up to date than the old data from the 1970s; notwithstanding which, companies still, almost universally, fail to recognise that your statistical chance of being killed on the roads is alarmingly higher than in a plane crash, so if you’re a pilot, gliding instructor or astronaut you just have to grit your teeth and bear it. The risk grading, incidentally, applies if you fly, glide or drive rally cars recreationally on your weekends.
These days the insurers rely more on “clinical medical underwriting”, which takes into account the offset effects of people’s dieting, exercising and generally taking steps to live healthier lives – meaning, not unreasonably, an expectation of greater longevity.
The types of benefits you may expect to receive from high risk life insurance coverage are limited. In some cases, the death benefit payable to the beneficiaries will be limited to just the amount of the premiums that have been paid in, especially if death is the result of a health condition that existed at the time the policy was written. Other companies might specify a period of five years during which premiums only will be paid out in the event of death. Commonly, suicide will not be paid out if it occurs within the first 13 months of the policy’s life.
You enjoy a better prospect if you hold an existing policy, and subsequently acquire a life-threatening affliction. Check your policy for what’s known as a “guaranteed insurability” rider; if this clause is contained in your policy, you are entitled to increase the value of your coverage without having to pay a higher premium.