Understanding High Risk Life Insurance


As the saying goes, “Knowledge is power.”  When it comes to life insurance, the more knowledge and experience you have, the better you will be able to serve your potential clients and gain an edge over the competition.  Many agents shy away from high risk life insurance simply because they don’t have the knowledge to properly serve the client.  In this blog post I’ll be discussing what high risk life insurance is, what options your clients might have and I’ll be giving you some tips so that you can carve out a niche for yourself and be successful placing high risk life insurance cases.

What is High Risk Life Insurance

Life insurance companies typically have 4 main health ratings – ranging from Preferred Plus, Preferred, Standard Plus to Standard. Factors such as height/weight, cholesterol, blood pressure and family history of heart disease or cancer are just a few of the components that determine which health rating applicants could receive.  The better the health rating, the better the price for life insurance.

High risk life insurance, also known as impaired risk, refers to cases where an individual would not qualify for regular life insurance, even for a standard health rating.  Typically, this category of life insurance is reserved if a person has a pre-existing condition.  It could be something less serious, such as diabetes, or something more serious like heart disease.

Options for High Risk Life Insurance

The health condition of the individual will determine which type of life insurance policy should be pursued.  For example, a type 2 diabetic can typically get the same type of life insurance policy that a healthy individual can get.  The difference is that a diabetic won’t qualify for preferred, or standard rates.  Instead, they will likely get a Table Rating.  Table ratings are ratings lower than standard and range from Table A-H (also called Table 1-10).  The higher the number, the more expensive a policy’s premium.  Some people will qualify for a table rating even if they are considered high risk.

For those individuals that don’t qualify for a rated life insurance policy because of their health, there are other options. Policies called “Graded Death Benefit” policies are one option for which most high risk individuals could qualify.  These policies are called ‘graded’ because they have a waiting period (usually 2 or 3 years) before 100% of the death benefit goes into effect.  Different carriers have different options ranging from 25, 50, 75 or 100%, while some carriers provide only a reimbursement of paid premiums, plus 5 or 6% interest during the waiting period.  Essentially, if the insured were to die in the first few years of the policy, the policy’s beneficiary would receive all the premiums that were paid, plus earned interest, but the beneficiary would not receive the policy’s death benefit until the waiting period has ended.  Policies such as these allow life insurance companies to minimize their risk, while at the same time provide an option to someone who would otherwise be declined for a regular life insurance policy.

Tips for Success in High Risk Life Insurance

Success in placing high risk life insurance cases comes with experience.  Here are some tips for gaining experience and learning how to place high risk life insurance successfully:

  • If your agency has an in-house underwriting department, they will be able to help you figure out what are the best options for a prospective client.  Your job is to understand the client’s current medical status, as well as past health history.  Your agency may have questionnaires that you can use to help ask the right questions regarding specific medical conditions.
  • If you don’t have an in-house underwriting department, I recommend partnering up with an experienced agent that can help you with your cases.  You will have a better opportunity to help your client, as well as learn at the same time.

Lastly, I recommend that you become an independent life insurance agent if you want to work in the high risk marketplace.  By having access to multiple life insurance companies, you will learn different company’s guidelines and be able to recommend the appropriate company based specifically on your client’s situation.  High risk life insurance is both an interesting and profitable insurance product the life insurance marketplace.  I urge you to gain additional knowledge in this space and gain an edge over the competition.


What do you think?  What has your experience been with high risk life insurance?  Share with us below!

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Liran Hirschkorn

Liran Hirschkorn

Liran Hirschkorn is the founder of ChooseTerm.com and is an expert in the insurance industry where he works hand-in-hand with highly-rated life insurance companies. Email Liran at liran@chooseterm.com
Liran Hirschkorn

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