Insurance companies consider multiple factors when determining your eligibility for a life insurance policy. They have developed guidelines for determining coverage and rates for different age and activity groups of people.
Risk, for an insurance company, means that by approving a policy an insurance company assumes that the amount of money they receive from you will be more beneficial to them than the amount they might have to pay for you.
This is why life insurance rates are high for specific age groups or people that participate in higher-risk activities. Typically, people over the age of 50 are more likely to have higher insurance rates, along with people that have certain health conditions or life-styles.
Reasons You Might Be Considered High Risk
Life insurance companies often deny coverage to applicants based on health criteria or other life circumstances. These applicants may be denied coverage during the initial screening process when completing the life insurance application. Here are some of the likely reasons you may have been denied life insurance coverage:
- You use tobacco products, abuse alcohol or other controlled substances.
- You have a terminal illness.
- You have any of the following health conditions: heart disease, obesity, cancer, diabetes, asthma, multiple sclerosis, other chronic conditions or diseases.
- You have a high-risk profession such as logging, commercial fishing or other industries with high death/injury occupational statistics.
- You engage in high-risk hobbies such as skydiving or scuba diving.
Carriers of Guaranteed Acceptance Life Insurance
If you are looking for a high-risk life insurance policy or a guaranteed acceptance (sometimes referred to as guaranteed issue) life insurance policy, these companies are great places to begin your search. Each company offers different options that may fit the unique financial circumstances of you and your family.
American International Group (AIG) Direct offers a Guaranteed Issue Whole Life Insurance (GIWL) policy that offers coverage with no medical exam and no health questionnaire to complete. This type of policy is ideal for individuals looking for coverage to pay extra expenses which include medical bills, funeral costs or other financial obligations. The policy is a guaranteed issue for individuals 50-85 that may not be insurable through other plans because of health issues. You can obtain a policy for up to $25,000 in coverage which includes chronic illness and terminal illness coverage. Premiums are guaranteed not to increase during the lifetime of the policy.
Colonial Penn advertises guaranteed acceptance life insurance beginning with a low rate per month. There are no pre-existing condition exclusions, no medical exam requirement and no rate increases due to any reason. This policy is available to applicants ages 50 to 85 (in most states) with coverage amounts available up to $50,000.
Americo’s Ultra Protector Series policy is a guaranteed issue life insurance policy that offers level premiums with coverage amounts available from $2,000 to $30,000. It is available for individuals ages 50 to 80. There is no waiting period to receive the full death benefit, and up to 50% of the full death benefit is available to those diagnosed with a terminal illness. There is also a 3-year graded death version of the guaranteed issue policy with coverage amounts available from $2,000 to $10,000. With the 3-year graded plan (Ultra Protector III), year one pays out 5%; year two pays out 10%, and year three will pay a death benefit of 75%. The full death benefit amount is available if the death is caused by an accident.
MetLife offers a guaranteed acceptance whole life insurance policy for applicants ages 45 to 75 called Final Expense Whole Life Insurance. With this policy, you cannot be denied coverage due to health reasons. There are no medical exams or health questionnaires to complete. The policy pays a limited graded death benefit for the first two years of coverage (if by other than an accident), with coverage amounts ranging between $2,000 to $50,000.
Mutual of Omaha
Previous offerings have been reduced to one policy offering—Whole Life Insurance. The premiums are guaranteed to never increase and the whole life guaranteed direct policy provides guaranteed acceptance for ages 45-85 (when purchased through an agent). Benefits are available from $2,000 to $40,000 (in Washington state, $5,000 to $40,000). If you purchase the policy online, the amounts available are from $2,000 to $25,000 (in Washington state, $5,000 to $25,000).
United Home Life
With United Home Life, three different plans are available to cover you no matter your medical situation. The Express Issue Whole Life is a graded-benefit policy, where the first two years are a refund of all insurance premiums, followed by full benefit after the first day of the third year. The Express Issue Premier and Deluxe are customized individually, with immediate full death benefits.
Fidelity Life offers a permanent whole life insurance policy called Rapid Decision Guaranteed Issue. Coverage amounts are available up to $25,000 for individuals ages 50-80. There is no health examination requirement and no medical questionnaire to complete. This policy has a cash accumulation value. For the first three years of the policy, there is a reduced death benefit. However, beginning with year four, full coverage is provided. Premiums remain level throughout the life of the policy.
Vantis Life Insurance Company
The guaranteed whole life insurance policy offered by Vantis is called SBLI Guaranteed Golden Life Insurance. It is available to individuals ages 50-80. No health questions or physical examinations are required. Policy values are available in $5,000 increments up to $20,000. Premiums are guaranteed never to increase. Accidental death is covered during the first two years of the policy, and after two years, full coverage is provided.
Gerber has a guaranteed acceptance life insurance policy for individuals ages 50 to 80. No health questions are asked, and no physical examination is necessary. Policy amounts are available ranging in value from $5,000 to $25,000. The Gerber guaranteed acceptance life insurance policy accumulates a cash value which will grow over the life of the policy
Alternatives to Guaranteed Issue Life Insurance
When considering alternatives to a guaranteed acceptance life insurance policy, accidental death and dismemberment insurance (AD&D) might be worth looking into. With AD&D insurance, your beneficiaries are paid in the event you suffer death through some type of accident. Even if you don’t qualify for a standard life insurance policy, you may be able to find an accidental death & dismemberment policy that will provide some additional protection for you and your family.
If you are primarily concerned with the final expenses your family will face after your death, you may want to consider a pre-paid funeral plan. This is a plan that may be purchased from a funeral home. You can plan your arrangements and pre-pay for the service before your death, preventing your loved ones from having to make and pay for your final arrangements.
The Bottom Line
Even if you have been told you are ineligible for a life insurance policy, there may be options available to you. Have a consultation with your personal insurance agent before making a final determination to see what options will fit you and your family the best.
If you do decide to buy a guaranteed acceptance life insurance policy, you'll want to check out the insurance company’s customer service record through consumer organizations such as J.D. Power & Associates and its financial strength rating through insurance rating organizations such as A.M. Best.
Related: Best Whole Life Insurance Policies