What it means to be considered “high-risk” in terms of life insurance

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life insurancelife insurance


What it means to be considered “high-risk” in terms of life insurance

Life insurance can be a tricky thing, but it most definitely is a necessary thing. But the process of getting life insurance isn’t always as simple as finding the best quote and going ahead with monthly payments.

Medical exams, individualised policies and types of insurance all come into play. And then we get “high-risk” thrown into the mix that makes life insurance a bit more expensive and complicated.


High-risk insurance – what it is

When you apply for life insurance, your whole lifestyle is examined. And if you qualify as being “high-risk”, it means that something you’re doing or a condition you have is going to mean your premiums will be higher than normal life insurance premiums. So, high-risk insurance is insurance policies specifically for candidates that live a dangerous, risky or unhealthy life where insurance companies are likely to pay out sooner rather than later.


What qualifies as “high-risk”

There are different categories of high-risk clientèle that insurance companies (like African Unity Life that works specifically with risk products and offers risk benefits) consider in order to evaluate the cost of your premiums in order to give you the coverage you’re looking for.

  • High-risk occupations: Miners, firefighters, underwater welders, oil-rig crews and construction workers are a few people in high-risk occupations. Where there is a good chance that accidents will happen in the work environment, there’s a good chance your insurance will qualify as high-risk.
  • High-risk hobbies: If you’re a lover of adventure or an adrenaline-junkie in your free time, then prepare to be looking for high-risk insurance policies. Scuba-diving, skydiving, car racing, rock climbing, boxing or flying planes are all a no-no for regular life insurers.  
  • High-risk lifestyle habits: The most common high-risk lifestyle habit that raises an insurer’s eyebrow is smoking. Any lifestyle habits that are detrimental to your health that you do to yourself, will make you a high-risk client.
  • High-risk health status: Sometimes you can’t help your health status if it’s hereditary, you’re born with it or it develops over time. Your health status influences your life insurance and if you have any life-threatening diseases, your premiums will make sure you know it.

But despite these categories, you may still qualify for life insurance and that’s what counts.


Situations where you would be declined for life insurance

There are certain characteristics that will ensure that you would be declined for life insurance and it won’t just be a matter of finding the right insurance company to give you a high-risk option.

  • Financial implications: One needs money in order to accumulate coverage with an insurer, so there's no surprise that the inability to afford a certain policy might lead to the insurance company declining your application.
  • Driving under the influence: Drug and alcohol abuse that is either picked up during our medical examination or through filed records may be the reason your application is declined. If you have been charged with driving under the influence three or more times in a period of 10 years, you will not qualify for life insurance coverage. It would take being sober for three years or more from drugs and/or alcohol before you could consider seriously applying for life insurance.
  • Criminal record: Obviously, your criminal record is dependent on a few details before an insurance company would just decline your life insurance. Context is required for the type of felony committed, time period since it occurred, probation period and number of convictions.


Benefits that trump high premiums

But at the end of it all, it’s still a good idea to get life insurance. Yes, your premiums may be extremely high and you’re only just able to afford them, but if you have dependents, life insurance is the right way to go.

Here are a few benefits that trump the fact that you’ll be paying high premiums:

  • Peace of mind: Most people experience a fear of the future and the fact that it’s unpredictable. You never know when is the right time to make provisions and plan for what happens to your life when it’s over. Life insurance gives you peace of mind that there are systems in place to care for whoever may be left should you pass away.
  • You’ve got them covered: It’s all about who you’re responsible for. Life insurance makes sure that any debt, cost of the funeral and surviving after you’re gone is covered and catered for. Having to deal with the loss of a loved one is hard enough without having to worry about funding for a funeral and wondering how to continue with the loss of your income.
  • Cash value: But, the best part, depending on your policy and type of insurance, is that you may have access to cash value and living benefits. Being able to make use of the money from your policy premiums to pay off debt, take out a policy loan or even buy a home. Life insurance is definitely worth it.


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