The Ins and Outs of High-risk Life Insurance
Universal Life Insurance Company (Photo credit: Thomas Hawk)
The premium that you pay for your life insurance policy depends on a number of factors, for example your age, gender, occupation and also the amount of risk you bear. Insurance carriers do these calculations and ascertain the probability of offering a payout or one-time benefit if the insured person passes away. People whom the insurance carriers feel as highly risky and are subject to a considerable payout are provided with high-risk life insurance policies.
High risk life insurance policies: the basics
In order to get eligible for a high-risk life policy, you need to answer specific questions that will be asked by the carrier. These queries will include questions about your health condition and your individual financial position. If you are considered risky by the insurance company, then you will be typically subjected to pay a higher rate of premium since your life span is smaller than people who don’t have any risk or health hazard. On certain occasions, applications are turned down due to assumption of a significant degree of risk.
How are the high risk groups ascertained?
Other than the health condition, the carriers also take into consideration the following principal factors when they work out the amount of premium to be paid:
- Whether the applicant participates in any adventurous pursuits or adventure sports
- Whether any occupational hazard is involved in the applicant’s life
Occupations that are regarded as highly risky include the following:
- Mining operations
- Oil exploration and extraction activities (specifically if functioning away from land)
- Working as a firefighter
- Working as a fisherman or pilot
- Employed in the military
Sports and adventurous pursuits that are regarded as extremely risky include the following:
- Diving
- Motorsport
- Parachuting
- Skiing
- Extreme sports like professional BMX, snowboarding, as well as whitewater rafting
With the degree of participation in the abovementioned adventure sports and pursuits, it becomes easy for the carrier to evaluate and compute how this pursuit will impact on somebody’s physical condition or lead to a premature casualty at the time of figuring out the premiums. During this procedure, how experienced you are and your expertise are also taken into consideration.
People who are aged above 60 and have pre-existing illnesses like cancer, diabetes mellitus, or cardiac arrest can also be grouped as the “high-risk” group of people. As a result, their premium rates will be high as well.
If you have a smoking habit, then also your premium rate will be high. This is due to the reason that surveys demonstrate that smoking is highly detrimental to health and results in various severe illnesses. These elements are considered important while issuing a high-risk life insurance policy.
Lowering the premium expenses of a high-risk life insurance policy
Now, can you reduce the premium expenses of a high-risk life policy? Yes, you can if you follow the steps given below:
- Maintaining a healthy standard of living
- Quitting smoking
- Lowering cholesterol levels or at least endeavoring to achieve so
Therefore, you should put a sincere effort in comparing quotes and shopping around to get an ideal cover for your needs. High-risk life plans are usually offered by specialist insurance carriers. Understand how much coverage you are getting and how any modifications in your standard of living may influence the legitimacy of your existing policy. Last but not least, don’t suppress any information that might invalidate the policy.
Author bio: Sam Payn is an ardent blogger who authors articles and blogs on a host of topics that include but are not limited to family income benefit quotes and high risk life policies.
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Category: Life Insurance
