Certain set of lifestyle and medical complications usually make the purchase of life insurance tough with no insurer ready to provide you requisite cover. If your case is similar you should learn more about high risk life insurance to cover your medical bills and other unexpected contingencies that might suddenly arise in future. With increasing number of people engaging themselves in high risk activities and behavior or occupation, the need for insurance for high-risk niche is important for both insurers and the people involved in such activities. However, these cases do not have a normal less risky life or medical condition, the life insurance rates are bound to be higher.
Who all fall under in high-risk life insurance category?
If you are wondering whether your lifestyle falls under high-risk category, here is the comprehensive list of various high-risk lifestyles:
- Adventure seekers: The group of people who are actively involved in adventure activities and games like mountaineering, bungee jumping, canoeing, river rafting, deep sea diving, paragliding, any other adventure activity that has inherent risk of life involved. The insurers usually categorize these people as high-risk persons thereby denying them of normal life insurance rates.
- Sexually promiscuous: Engaging regularly in sexually activities with multiple partners expose to the risk of sexually transmitted diseases thereby making a person fall into high-risk category. During the time of purchase of policy, the insurer enquires about sexual history of a person along with number of partners, to adjudge whether he/she fall under this category. Similarly people with STD’s are also labeled as high-risk individuals.
- Rare-disease: If the person is suffering with some kind of rare disease which is not covered under normal life insurance, he /she fall under this category.
- Risky career: Certain career choices involve inherent risk of life, and thus people who pursue those careers fall under category of high-risk individuals. Examples of such careers are pilots, motorcycle/car racing, fire-fighting, army etc.
I fall under one of the above categories, what next?
If you fall under one of the above categories, you certainly will be denied a normal insurance; nevertheless, it does not imply that you will not be insured. However, it limits you to a fewer choices. You need to do an extensive research about your needs and the rates that various companies will be putting on you to insure you.
The insurance premium rates for a high risk life insurance policy is usually higher than a normal policy with equal benefits besides making you harder to be insured, for most of the companies do not wish to provide insurance cover to individuals with uncertain life expectancy. Besides this, the risk of injury in case of high-risk individuals is much more than normal individuals making insurance firms vulnerable to losses in case they charge normal rates for you. Thus, the inflated premium is charged to cover for administrative cost, profits as well as cost of providing you the cover you need.
How does high risk life insurance function?
The working of high risk life insurance is similar to normal life insurance i.e., in the event of the death of insured, an amount equivalent to the face value of the insurance is paid to the designated beneficiaries. However, one significant difference to note is , in case the death occurs within a pre-determined time period, the amount paid to the beneficiaries is equal to the total amount paid to the insurance firm as premium. For instance, if a person dies within 3 year of purchase of the insurance policy and the death was a direct result of his risky behavior, the amount that the insurance firm will pay to the beneficiary of such individual will be the equal of total amount of insurance premiums paid in those 3 years.
Where to find the high-risk insurer?
The insurance of high-risk individuals is not easy, and the options as stated above are limited. Most of the traditional life insurers do not cover high-risk individuals and turn them away. If you are unable to find the insurer to cover you, begin by contacting state board of insurance in your state or area. Explain your condition to the designated authorities and request for a lost of qualified high-risk insurance providers. Look for the firms with high B+ rating or higher A.M, to shortlist the firms for your life-insurance cover. Companies with the above criteria have lesser claim settlement problems and thus will save you the hassles in case of your insurance claims.
What will be my rates in case I join risk pool?
The people who are left uninsured due to their life-style or medical condition and have higher incomes to be covered in Medicaid (in case of sick individuals), they might go uninsured if they do not join a risk pool. Risk pool is the last option which limits the alternatives available to the individuals. Risk pools are provided in 35 states for such individuals. The people in risk pool can expect the insurance rates to vary from 150% to 200% of the normal insurance rates. Such mind-boggling increase in rates is primarily due to very high risk involved to cover such individuals. Thus of you are planning to take a life insurance cover for yourself , make sure that you are ready to pay exceedingly high insurance premium rates.
Although, the options available to high-risk individuals are less, besides exceedingly higher premium rates, having a policy to cover your life is better than being uninsured, thereby saving your beneficiaries and families the problems they might have to face in the event of your death. Make sure you buy a policy which is comprehensive and functions more or less like a normal life insurance policy, in terms of settlement of claims and reimbursement of the policy amount. Another important thing is to check the claim settlement procedure along with the rates and other costs charged by the insurer for insuring you.
