What is High Risk Life Insurance? Its Costs and Providers?

Thang Truong
Thang Truong
Updated on:

Life insurance can have a reputation for being difficult to obtain unless you are perfectly healthy and live a low-risk life. However, that’s not everyone’s situation. Sometimes, your job might have certain physical risks. You might have a health condition. Or you have a thrilling hobby like mountain climbing that you just can’t part with. That’s where high risk life insurance comes into play. Below we’ll look at what it is, where you can find it, and who should consider it.

What is High Risk Life Insurance?

Simply put, high risk life insurance covers anyone who is normally risky to insure. Examples are those that have risky professions, risky hobbies, high risk habits or high risk diseases. More specific examples can include:

  • Your hobbies involve a level of physical risk, like skydiving, scuba diving or racing
  • Your career could contain a decent level of risk, like miners or firefighters
  • Certain habits can cause you to be high risk, such as smoking or chewing tobacco 
  • Any serious or life-threatening diseases can put you at risk, like cancer, diabetes, epilepsy, Alzheimer’s or pancreatic disease

Since many of these conditions involve a likelihood of injury or death, insurers consider people who are in these situations to be a high risk to insure. However, that is where certain products are available to help even high-risk individuals secure life insurance.

Typically, a high risk insurance plan is considered guaranteed life insurance. These come as either a term life or permanent life insurance plan. However, they often don’t have traditional underwriting or medical exams and questions.

Common Product Features

Common features you might find include: 

Term vs. Permanent: Term life usually goes for a set period of time, usually 10, 20 or 30 years.  You then have to renew the policy and re-apply. Permanent means you never have to renew the policy, and many of these types build cash value.

Coverage amounts: These can be quite low compared to more traditional policies. Because you are more of a risk to insure, your death benefit may be lower. It’s common to find high risk life insurance coverage amounts between $5,000 and $25,000. This is quite low compared to the traditional policies that commonly to run from $100,000 all the way up to $500,000 and higher.  

Waiting periods: Guaranteed issue policies tend to have a waiting period of around two years. Only a portion of your death benefit is paid during those two years. This is to prevent people from signing up for a life insurance policy while they’re on their death bed, as that would put a significant financial strain on the insurer if enough people were to do that.  

Pros and Cons

In order to decide if this policy is right for you, here are some pros and cons at a glance:

Pros of High Risk Life Insurance:

  • If you are high risk, you may be able to find more affordable coverage, or coverage at all, by selecting a guaranteed acceptance policy rather than getting quotes from a more traditional life insurance policy
  • You can find life insurance without having to give up your lifestyle, like a certain hobby

Cons of High Risk Life Insurance:  

  • Premiums tend to be higher on guaranteed acceptance policies, and as mentioned above, coverage amounts tend to be lower 
  • Waiting periods are common

How Much Does High Risk Life Insurance Cost?  

You can expect to pay more in premiums for a guaranteed acceptance life insurance policy than with other types, since the insurer is going in without knowing anything about you. That’s because there are commonly no medical exams or long questionnaires for guaranteed acceptance life insurance.  

>>MORE: What is No Medical Exam Life Insurance (Term and Whole)? Who Is It For?

It pays to shop around for a guaranteed acceptance plan. While premiums are higher, you may be able to find competitive rates even at the higher price point. That is where it can help to work with an agent.

Below are some example rates for guaranteed issue life insurance:

  • Age 40/$25,000 in coverage/through Great Western: $119.58
  • Age 50/$25,000 in coverage/through Gerber: $108.86
  • Age 65/$10,000 in coverage/through AIG: $84.15

Below you can see that high risk life insurance is far more expensive than more traditional plans for the amount of coverage you’re getting. For instance, we have mock quotes for a 45-year-old male. He pays:

For a 40-year-old male, he pays:

  • $212 per month for $250,000 in coverage through a term life policy 

The premiums are up to twice as high, but you’re getting $150,000 to $250,000 amounts in coverage with more traditional policies, versus the $10,000 to $25,000 coverage amounts with guaranteed acceptance.  

Final Thoughts

High risk life insurance is meant for people who have some sort of risk in their life, like a risky hobby, profession, disease or habit. It’s most commonly called guaranteed issue or guaranteed acceptance insurance. Under these plans, you can’t be denied for being high risk, and they don’t come with medical exams. However, your premiums may be higher and your coverage amounts lower. But if you can’t get life insurance elsewhere or your premiums from a traditional plan are extremely high, this could end up being a value for you.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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