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What is High Risk Life Insurance?

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High risk life insurance is coverage for people who either have dangerous lifestyles or who are suffering from serious medical conditions. Generally speaking, insurance companies make insurance decisions based on the age, condition and habits of people who come to them. At some point, many insurance companies will refuse coverage if they determine the risk is too great. However, there are some companies that specialize in high risk insurance.

Who Needs High Risk Life Insurance?

  • People with dangerous hobbies. If you enjoy skydiving, mountain climbing race-car driving or some other dangerous hobby, there are many insurance companies who will not offer life insurance to you.
  • People with serious health conditions. Not every insurance company will take on a new policyholder who has cancer, heart diseases, AIDS or other serious illnesses or conditions. For example, most people who have high blood pressure can get life insurance with any company, though they may have to pay more for their policy. But for some people who have become seriously ill, finding insurance can be extremely difficult and frustrating.
  • People with dangerous jobs. Most people with dangerous jobs, such as police officers and fire fighters, have insurance provided by their employer. There are some self-employed people who specialize in risk occupations such as high-rise window cleaning, for example, who would also need to find insurance companies that specialize in high risk life insurance.

What Are the Differences in High Risk Life Insurance?

  • Cost. You should expect to pay considerably more for high risk life insurance, most of which is permanent whole life insurance. Just how much more you might expect to spend compared to regular life insurance policies varies based on the particular medical condition or circumstance and the risk involved.
  • Payment restrictions. Virtually all insurance companies have restrictions in place so that someone cannot purchase high risk insurance as he or she is dying and then collect a full death benefit. Instead, companies generally have restrictions on the payout of death benefits for the first 2 to 5 years of the policy. During that period of time a policyholder will usually be restricted to only a return of the premiums paid, perhaps along with a small percentage of the death benefit.
  • Physical exam. You should expect a full physical exam, as well as extensive questions about your physical history and any prior conditions. While the "exams" conducted by some companies might be nothing more than blood work and some basic health questions, a high risk life insurance company will make sure it knows as much about your medical history and current condition as possible.

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