Do you suffer from a chronic medical condition that puts your life in jeopardy? Or, perhaps you work in a dangerous occupation or engage in certain types of activities that increase your chances of being involved in a fatal accident. Regardless of the cause, if you are someone who is at a greater risk of passing away than the average person, you might want to look into obtaining guaranteed life insurance for high risk individuals.
High Risk Life Insurance
For many people suffering from a chronic disease or who are involved in high-risk activities, the thought of getting life insurance may seem impossible. Or, you may worry that life insurance will be so costly that you simply can’t afford it. By purchasing guaranteed life insurance for high risk individuals, however, you don’t have to worry about your condition standing in your way. In fact, with guaranteed life insurance for high risk individuals, you are guaranteed to receive coverage regardless of your health and lifestyle. This is because guaranteed life insurance for high risk individuals is a special type of insurance that is issued without completing a medical exam or providing medical information.
The first step toward purchasing guaranteed life insurance for high risk individuals is to work with an agent who specializes in this type of coverage. By working with an agent who specializes in guaranteed life insurance for high risk individuals, you can be certain that agent knows where to find the best policies to suit your needs. In addition, that agent will know the additional steps you should take in order to increase your chances of finding affordable coverage.
Defining Guaranteed Issue Life Insurance for High-Risk Individuals
Guaranteed issue life insurance isn’t really any different than other life policies. It can be purchased as either a term or a permanent life plan. The main difference is that guaranteed issue life insurance does not involve customary underwriting practices and, as a result, the coverage amounts are usually lower than a standard life plan.
If you select a term plan, you can expect the coverage to last a specified amount of time. Term plans usually last 10, 15, 20, or 30 years but no more. Once a term life insurance policy expires, you’ll need to buy a new plan in order to remain insured.
To do so, you will need to work with your agent on re-applying for a new insurance plan at your then-current age. This means the premium on a new guaranteed issue term life policy will likely cost more than the original plan.
If the guaranteed issue life insurance coverage you select is a permanent policy, you will be gaining additional financial protection in the form of cash value.
Over time this tax deferred, cash value can then be accessed by withdrawing or borrowing funds. Some insureds borrow money from their whole life policy to pay medical bills or educational expenses. Any cash balances that you do not pay back into the policy will be deducted from the overall death benefit.
Applying for Guaranteed Issue Life Insurance As A High-Risk Individual
The first step toward purchasing guaranteed life insurance is to work with an experienced independent agent who will do their research into the best company for your personal situation. There are over sixty different life insurers offering guaranteed issue life insurance for high-risk individuals. You should have no problem finding a suitable option.
Your insurance agent will explain that a guaranteed issue life insurance policy for high-risk individuals is a special type of insurance that is issued without completing a medical exam, answering medical questions, or providing medical information.
There is no underwriting and a short application with only basic facts is required. You will need to include on your guaranteed life insurance application details such as age, gender, height, social security number, and tobacco usage.
A few life insurers may include a short list of “knock-out” questions on the application. Depending on how you answer these “knock-out” questions, you may eliminate yourself from the application process immediately.
For example, some guaranteed issue life insurance companies include “knock-out” questions such as:
Of course, your insurance agent will most likely know the companies that include these questions. If these are questions you wish to avoid, the insurance agent will know that too. He/she will then steer you towards a guaranteed life insurance policy for high-risk individuals that better suits your situation.
Since the standard underwriting process is eliminated, guaranteed issue life insurance for high-risk individuals can be issued very quickly. In fact, most insurance carriers issue policies within 48 hours but no later than 30 days from the time of submission. Typical life insurance takes six to eight weeks for approval.
A final note about all life insurance applications is to never include misleading or incorrect information. Many insureds find it tempting to deny being a smoker or down-playing their amount of tobacco usage.
This is a terrible idea! You may save on guaranteed life insurance premium by saying you are a non-smoker but you are putting your policy at risk. How will the insurance company ever know anyway? Well, if you end-up passing away from a tobacco-related illness then your death benefits may be withheld. It is best to be forthcoming with your insurance agent. Tell your agent whether you smoke cigarettes, cigars, pipes, e-cigs, or chew tobacco.
Coverage Amounts for Guaranteed Issue Life Insurance for High-Risk Individuals
The face amount of your guaranteed issue life insurance policy for high-risk individuals will most likely be lower than more traditional plans. Coverage amounts between $5,000 and $25,000 are what insurance companies typically offer.
It will be a challenge to find a guaranteed issue for high-risk life insurance plan that provides a higher coverage amount. This is because the insurance company knows very little about your health or lifestyle. It leads them to believe they will probably pay out on your policy earlier than normal which increases their financial risk.
Life insurance with low face amounts are considered “burial” or “final expense” plans as they usually are just enough money to cover funeral costs.
Your insurance agent will also tell you that a guaranteed issue life policy normally has a two year waiting period. This clause is common. It will provide a graded death benefit which means only a portion of the death benefit is paid during the first two years.
Or it will state the death benefit shall not be paid if you die prior to the policy being in force for two years. Instead the insurance company will refund to your beneficiary the total amount of paid premium. However, for most guaranteed issue life policies, deaths caused by an accident unrelated to your lifestyle will guarantee payment of the full death benefit.
If you are a high-risk individual then it’s most important to secure a policy as soon as possible. The two year waiting period clause should not deter you from applying.
Cost for Guaranteed Issue Life Insurance for High-Risk Individuals
Premiums for guaranteed issue life insurance policies are higher than more traditional life policies of equal coverage. This is because of the limited information the life insurer receives at the time of application. Therefore, the insurance carrier is taking on a higher risk by insuring individuals that may work or live in precarious situations.
Rather than simply denying you, the insurance company is willing to provide the coverage but at a higher cost. Your insurance agent knows this so he/she will certainly shop around to several carriers looking for the most competitive premium.
Your insurance agent will also know the steps you should take in order to increase your chances of finding affordable coverage. Keep in mind there are few factors that go into determining guaranteed issue insurance premiums.
So your agent will mainly focus on shopping around to different companies. Also, your insurance agent will probably tell you that being tobacco free for one year will help lower your guaranteed life insurance premium by fifty percent.
Be sure to confirm with your insurance agent if the policy premium could increase at any time in the future. Each policy is unique and it’s best to review every aspect of the contract’s fine print. You want to be sure the life policy you have is the right fit.