Life Insurance for People With Health Problems

Even with serious health problems, you can still buy life insurance.
Even with serious health problems, you can still buy life insurance. (Image: e.r. image by Andrey Rakhmatullin from

Life insurance is surprisingly affordable, unless you have health issues that make an insurance carrier uncomfortable. Any diagnosis of, or treatment for symptoms of, conditions that may shorten your natural life span are a major cause for concern to life insurance companies. If your issue is serious enough, the carrier might simply decline your application altogether. Thankfully, alternative forms of life insurance exist from multiple companies to serve the needs of people who can’t obtain policies via traditional means.

The Carriers’ Concerns

Health problems related to your cardiovascular system are of the utmost concern for life insurance companies. The statistical risk of early death is significantly greater in people with heart problems, including uncontrolled blood pressure, cholesterol and diabetes. Cancer is another major concern for insurance carriers, including the presence of cancer in your biological parents or siblings. Tobacco use is yet another primary concern for life insurance companies, as it has been medically proven that tobacco products directly cause a myriad of other problems that result in early death.

No Exam Required

People who are denied policies from traditional life insurance companies usually turn to companies with products that do not require in-depth underwriting or medical examinations. These “no exam” products are formally referred to as “guaranteed issue” policies. Most guaranteed issue life insurance products are specifically created for and marketed to people with health issues. Guaranteed issue policies have minimal underwriting, and little more than the completion of a brief application is required to get coverage.

Graded Benefit Policies

Graded benefit policies, also called “tiered policies,” are usually an available type of guaranteed issue product. To protect the insurance company from paying out significant sums to money to people who buy policies knowing their death is imminent, the tiered policies have a contract that notches up the death benefit every year until finally leveling off and remaining stable. Typically, if the insured person dies within the first two years after a tiered policy is purchased, only a small sum is paid to beneficiaries. However, after a year, sometimes two, the policy contract increases the death benefit to the originally intended level. This method of addressing a legitimate financial risk serves to protect the carrier by ensuring a certain number of premiums are paid.

Accident-Only Policies

Several companies have stand-alone accident life insurance products, which are often attractive to people with health problems that interfere with obtaining coverage through traditional means. An accident life insurance policy is designed to pay your beneficiaries if your death occurs as the result of an accident. Any medically-related issues that cause death will not result in the payment of life insurance proceeds. Your beneficiaries will only be paid the specified sum if your death is the direct result of an accident, and not medical issues.

You’ll Pay For It

No exam, guaranteed issue life insurance policies for people with health problems are evaluated, applied for and issued very quickly. Unfortunately, since the carrier is not provided with enough information to properly or completely underwrite applicants, policies are issued with the assumption that poor health is an imminent concern, which drastically increases prices.

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