High risk life insurance

If you have a serious health condition, a dangerous job, or you’re aged over 50 you’ll probably be charged a higher price for life insurance.

When you take out a life insurance policy, an insurer will make a decision about how much risk it thinks you are. When it comes to life insurance, it is looking at the risk of you making a claim on the insurance policy, which ultimately means if the worst happens and you die.

To make this decision insurers look at lots of different factors about your life and your medical history. 

If it thinks you are at high risk of dying within the policy, and therefore it paying out a sum of money to your loved ones, you’ll be expected to pay a high monthly premium. While if you’re at low risk of dying within the policy, your premiums will be lower.

But what happens if you’re quoted a sky-high price for your premiums, or you can’t find insurance at all? In some cases, insurers won’t provide insurance to some people, but there may be specialist providers who can help.

Here we look at what it means to be deemed as high risk by an insurer, how this is reflected in your premiums, and how you can still find a good deal. 

What is high risk life insurance?

It’s slightly morbid to think about, but when you take out a life insurance policy, the insurer is deciding when you might die. It does this by asking lots of questions about your lifestyle and your medical history.

If you are deemed as high risk your premiums will be higher, as there’s a higher risk you will make a claim on the policy.

Who is deemed as being at high risk?

It’s not just your health that can put you at high risk when it comes to life insurance; your profession and your lifestyle can also contribute to this.

Pre-existing medical conditions

You’ll need to give details of any pre-existing medical conditions when you buy a new insurance policy. The type of condition will determine the price you are quoted. Some milder conditions which don’t affect you greatly are unlikely to make much of an impact. However, more serious conditions such as epilepsy or Multiple Sclerosis could push up the price of your premiums.  

It’s very important that you give details of any pre-existing conditions, as if you don’t you could have problems making a claim on the policy. If the worst happens and you die, the life insurance provider will need a copy of your death certificate. Your death certificate will give details of the reason for the death, and if your death was caused by  something you knew you already had, it can make the policy invalid.  

Age

The older you are, the higher your risk becomes of dying. Therefore the price you pay for insurance also rises as you get older. There are some insurers specialising in insurance for older people, such as over 50s policies. These don’t require any medical information, however they can also be far less generous than standard policies, and usually don’t pay out anything if you die within the first 2 years. 

Smokers

It’s probably not a huge surprise that insurers think smokers are a high risk and therefore charge them more for life insurance. To be considered a non-smoker, you usually have to have stopped smoking for several years. 

Profession

When you buy an insurance policy you’ll need to tell the insurer what your job is. This can have an impact on the price of your policy, depending how risky the insurer thinks it is.

Jobs such as firefighters, police officers, or soldiers are the kind which are deemed high risk and those in these professions will probably have to pay more for insurance. However, even office jobs which may be relatively risk-free could affect the price of a policy. Some insurers will ask where the office is based to determine how safe you are while at work.

Lifestyle

Insurers will also ask about what you do in your spare time, including hobbies. If you spend your spare time taking part in high-risk activities, such as bungee jumping or scuba diving, this is likely to push up the cost of your premiums. While if you just do regular exercise, this may actually lower your premiums.  

Obesity

If you have a high body mass index (BMI) this puts you at a higher risk of becoming ill. When you buy the policy you’ll need to tell the insurer your height and weight and it can then calculate your BMI, although you can also do this for free on the NHS website.

Where you live

If you live in an area of the country, or the world, where there is a low life expectancy rate, this means you are also at risk of dying at a younger age. This can push you into the high-risk category and affect your premiums.

Travel

If you’re a regular jet setter and travel frequently, either for work or leisure - or both, this could also push up the price of your premiums and move you into the high-risk category for life insurance. 

How can you find affordable insurance if you’re high risk?

Even if you’re considered high risk, this doesn’t mean there isn’t an insurance policy for you. It also doesn’t mean you need to pay sky-high fees for one.

There are lots of policies on the market and therefore it’s worth looking at different insurers and comparing prices before you buy.

A comparison website or a specialist broker can help you to do this, and it’s an easy way of comparing lots of different quotes quickly. 

With life insurance you always need to look at the small print as well because it’s an area where cost is not the most important factor. Instead you need a policy that meets your needs and most importantly will pay out and protect your family should the worst happen.

What should you look for in a policy?

If you’re looking for a new insurance policy, it needs to meet your needs. The last thing you want is to pay for a life insurance policy that then won’t pay out.

This is why it’s important to read the details of the policy before you buy. In particular, you should look out for the following:

  • Illnesses and diseases covered in the policy

  • How much the policy will pay out on death

  • The length of the policy if it’s not set for the whole of your life

  • The cost of the monthly premium

  • Customer reviews of the insurer

  • The insurer’s payout rate (which you can find on its website)

It might be possible to lower your risk

While changing careers might be off the cards, there are some things you can do to lower your risk which will in turn lower the price you pay for insurance. 

These include quitting smoking, drinking less alcohol, and taking up regular exercise. If your lifestyle or health situation changes you should also let the insurers know if you have a policy in place as this may lower the cost. 

What to do if insurers won’t accept you

If you are deemed very high risk you might not be accepted by mainstream insurers, or the price you are quoted could be extortionate. 

There are a number of specialist insurers which could help. It’s worth asking others in your profession, or your employer, as well as medical experts if they can recommend any.

The British Insurance Brokers’ Association also has a free service to help match insurers with people who have been rejected elsewhere.

Are there any alternatives?

Unfortunately, if you can’t find a life insurance policy anywhere, it may be the case that you aren’t able to get one.

There is a policy called ‘impaired risk life insurance’ which you may be able to get instead. This is for people with pre-existing conditions, although the price is a lot higher than standard insurance.  

You may be able to exclude certain illnesses from your policy. This means if you’ve had an illness before, such as cancer, and you get it again and die from it, you wouldn’t be able to claim on the policy. But if you died from a different illness you could use it.

There’s also critical illness insurance which you could consider. This provides an income if you are diagnosed with a critical illness and unable to work, although again the prices are likely to be high if you are very high risk.  


15th September 2020