High-Risk Life Insurance Client Approval Process

Ty Stewart - Founder - SimpleLifeInsure.com Written by Ty Stewart - Last Updated October 21, 2019

You may have heard it's hard to be approved for life insurance if you are considered a risk.

You may have already been declined for coverage and searching for help.

You may be wondering what the heck is actually considered "high-risk" life insurance?

These questions will be answered plus a proven plan to get you approved at the lowest possible rates with the best companies out there.

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What Is High-Risk Life Insurance?

All life insurance carriers will assign a risk class or health rating to you.

Only about 5% of U.S. adults will qualify for the very top rating known as Preferred Plus. About another 10% may be eligible for Preferred. 

The rest of us (other 85%) have at least some additional risk that will be taken into account when determining your premium payment on the policy. 

These risk factors may just keep you at Standard rates or they may bump you down to more expensive rates. It depends on how each company views these impaired risks which is why it's so important to apply at the best one for your specific risk profile.

5 MAIN FACTORS THAT DEFINE HIGH RISK IN UNDERWRITING

1.

Health

This includes current and past medical conditions, prescriptions, height and weight, and lab results from a medical exam if you take one.


Learn more:  Life insurance with health issues

2.

Family history:


They primarily look at your parents and siblings for evidence of certain diseases at or younger than specific age thresholds as the data shows that in some cases, you may be at increased risk.


Learn more: How family history affects life insurance rates

3.

Smoking and tobacco use:


Put simply...smokers pay higher rates. Cigars, marijuana, vaping or e-cigarettes will all be viewed slightly different depending on usage.


Learn more: Life insurance for all types of smokers


4.

Dangerous occupations or hobbies and activities:


Certain professions and jobs such as a firefighter or window washer on skyscrapers may bump up your risk profile. Activities such as skydiving or rock climbing also raise risk depending on frequency.


Learn more: Life insurance for dangerous hobbies


5

Other lifestyle factors:


Poor credit including a recent bankruptcy may increase your rates. Multiple moving violations on your driving record as well as a criminal background are also considered risk factors during life insurance underwriting.


Learn more: 

Life insurance with a criminal record 

How your driving record affects life insurance rates


Best Companies For High-Risk Life Insurance 

There really is NOT one best life insurance company for all the different risk profiles. Sorry to disappoint some of you reading. 

The below carriers do have a recent track record (it changes and we constantly monitor this) of approvals with impaired risk applicants when the application is presented correctly. 

Please Be Aware:

You do not want to just fire out applications to these companies without making sure they are the right fit for your specific situation. 

effect of high cholesterol on life insurance rates at Prudential

Prudential

Prudential has lenient underwriting for many different health issues and are particularly strong with sleep apnea and depression.


Medical marijuana use will be judged by the underlying condition it was prescribed for. They are also strong for smokeless tobacco such as e-cigs where non-smoker plus rates are possible. 


Their DUI underwriting guidelines are among the most forgiving in the industry as well. 


Prudential's rates may appear high when comparing quotes but if they allow you to get approved at a better health class, you save money on premiums in the end. 

Lincoln Financial term life insurance carrier

Lincoln Financial

Lincoln Financial is very competitive with high-risk underwriting for a variety of issues. 


Chewing tobacco and cigar users can qualify for non-smoker rates despite testing positive for cotinine (nicotine byproduct) in a urine sample from the exam. 


Prostate cancer and hepatitis are other conditions where we have had success with past clients. 


Lincoln's underwriting chart for high blood pressure is very favorable towards the Preferred health class.


AIG (American General) term life insurance company

American General (AIG)

It's possible to obtain some of the lowest rates anywhere with AIG but you've got to fit their underwriting criteria and while they are lenient with certain things, they are strict on others. 


AIG has multiple credit and offset programs that can improve your health class based on certain factors. You are essentially "trading" good risk to cancel out some bad risk. This can lower your rates.


Significant foreign travel of up to 8 weeks per year will not affect rates with American General in most instances. This is above and beyond the industry norms.

3 Step Approval Plan To Increase Your Chances 

We can't perform miracles.

But what we can do is use our experience, tricks of the trade, and hard work to make sure our clients get the best approvals at the lowest rates. Every. Single. Time.

Here is the process we use:


1

Information gathering

When clients contact us via a quote request, we reach out to learn more, much more. 

Our fact-finding mission and your honesty are crucial to the end result. We know the questions to ask because we know the underwriting guidelines inside and out at each insurance company. 


If you speak with an agent that just wants to take your application and move on without asking questions, RUN!

2

Consult the underwriters

Most of the time we'll know right away which are the best life insurance companies for your risk profile and be able to discuss options. Other times we may need to dive deep into the boring underwriting manuals and get back to you. 


In some cases with multiple or unique risk factors, we may do an informal quote request known as a "Quick Quote". We'll contact 5-15 carriers and discuss tentative offers before a formal application is submitted. 

3

The Best Shot Application

If we used a quick quote to obtain a tentative pre-approval, we'll attach that to remind them. In certain cases, we'll write an accompanying cover letter to explain circumstances that may have led to your current risk state.


We will also highlight any good things such as a healthy diet or exercise which could earn you lifestyle credits that may nudge you into a better rate class (lower payment). This is our chance to "sell you" to the carrier. 

What Happens After the Application is Submitted?

We'll prepare and coach you through the underwriting process and help expedite any medical records request if needed by the underwriters.


Once the offer comes back we'll review with you and it's your decision if you want to put life insurance coverage in place for your loved ones. It's only now that you have to make a payment. 


In some cases, we may not get the result and rating we had hoped for and will advise if we think pivoting to another carrier may be a good idea.

Determining Your Risk Class

The 5 factors towards the top of this article will place you into a health class.

The normal health ratings almost all companies use are:

  • Preferred Plus
  • Preferred
  • Standard Plus
  • Standard
  • Preferred Smoker
  • Standard Smoker

"


But what is considered high-risk for life insurance?


High-risk or impaired risk life insurance typically means we are moving beyond (below) the normal rate classes.

Now we get into the substandard levels also known as table ratings and potentially have "flat extras" applied to some cases.

Table Ratings

The 10 substandard rate classes that are Table 1 to Table 10 but are sometimes referred to as Table A to Table J. It's the same thing. 

Each level lower, there is a 25% premium increase added on top of the Standard rate for your age.

So we have:

  • Table 1 = Standard +25%
  • Table 2 = Standard +50%
  • Table 3 = Standard +75%
  • Table 4 = Standard +100%
  • Table 5 = Standard +125%
  • Table 6 = Standard +150%
  • Table 7 = Standard +175%
  • Table 8 = Standard +200%
  • Table 9 = Standard +225%
  • Table 10 = Standard +250%

Flat Extras

This is an extra premium that is added on top of whatever health class you are offered. It is a fixed amount per every $1,000 of life insurance policy value. 

Common scenarios where these may apply is with a medical risk that is not far enough in the past quite yet for the underwriters to be completely comfortable. This could be after a recent weight loss surgery or when a form of cancer is only a couple years removed. 

In these cases, the flat extra will usually drop off after 2-7 years. You'll know upfront the exact time frame before making a final decision to accept the policy. 

A permanent flat extra may apply to a healthy person that engages in something deemed a high-risk activity such as deep scuba diving or skydiving.

Example 1:

Jake is a 43-year-old male who receives a Standard health rating on a $500,000 policy for 20 years. His base premium payment is $816 per year or $68 per month.

Due to a recent prostate cancer diagnosis that is all cleared up but only 2 years in remission, Jake has a $4 flat extra added that will last for 3 years.

$4 per every $1,000 of coverage is 50 units on the $500,000. 50 x $4 = $2,000. That $2,000 is the total amount of the flat extra he will pay each year. 

So his payment is now the base ($816) + the flat extra ($2,000) for a total of $2,816 per year for the first 3 years. 

After 3 years, the flat extra drops off and Jake is only paying the Standard rate of $816 per year.

Example 2:

Chelsea is a 32-year-old female in excellent health, she qualifies for Preferred Plus ratings. She is applying for $700,000 of coverage for a 10-year term policy.

Her base premium payment is only $180 per year or $15 per rmonth.

However, Chelsea loves to skydive and jumps almost every weekend. She will have to pay a $2.50 flat extra for as long as she continues enjoying this activity. The flat extra adds $1,750 per year to her total cost of life insurance.

She will now pay the base premium ($180) + flat extra ($1,750) = $1,930 each year.

How Much Does High-Risk Life Insurance Cost?

This one is tricky to answer as there are many factors involved and no two people are the same. 

The charts below provide some sample high-risk life insurance quotes for different scenarios showing the Standard health class and several sub-standard table ratings.

Remember: All life insurance companies have different underwriting guidelines so applying at the correct one is extremely important.

High-Risk Life Insurance Rates

42-year-old male looking at 20-year term policies - Estimated premium payments per month

Death Benefit

Standard Non-Smoker

Table 1

Table 4

Table 8

$100,000

$22

$28

$44

$66

$250,000

$42

$53

$84

$126

$500,000

$76

$95

$152

$228

$750,000

$112

$140

$224

$336

$1,000,000

$141

$176

$282

$423

55-year-old female looking at 10-year term policies - Estimated premium payments per month

Death Benefit

Standard Non-Smoker

Table 1

Table 4

Table 8

$100,000

$37

$46

$74

$111

$250,000

$79

$99

$158

$237

$500,000

$145

$181

$290

$435

$750,000

$213

$266

$426

$639

$1,000,000

$270

$337

$540

$810

Guaranteed Approval Options (Be Careful!)

If you can't qualify for regular life insurance, you can still be approved, everyone can. It's calling guaranteed acceptance life insurance, also known as guaranteed issue.

But be careful:

The rates are high and the coverage limits are low. You'll want to exhaust all options first and use guaranteed issue as a last resort.

 Just because you've been declined somewhere already doesn't mean there is not another carrier that may be willing to accept your risk profile. That is why shopping around through an independent broker is a good strategy. 

Guaranteed issue can also be used as a temporary bridge to get coverage now while you wait for more time to pass since a serious medical issue or event. At least you have some coverage now and can then revisit and possibly replace it 2-3 years down the road.

This is a strategy we've helped many clients with.

Accidental Death

Accidental death policies are another option to get guaranteed coverage in force fast. These AD&D policies are rather inexpensive. 

Just keep in mind they don't cover anything related to sickness, disease, or medical issue. They do cover things like car or plane crashes.

Accidental death is sometimes an option for our clients with a criminal history. If it's too recent, regular coverage may not be possible until more time has passed. 

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Getting Started

Compare quotes on our site from over 60 companies to get started. 

The best way to determine the right plan for your situation will be to speak with us after.

 Life insurance is our only business. We live and breathe this stuff every day.

About Ty Stewart
Avatar for Ty Stewart
Ty Stewart is the founder of SimpleLifeInsure.com. He is an independent life insurance agent that works for his clients nationwide to secure affordable coverage while making the process simple. There is never any cost to use his services.

Posted in High Risk