If your death would leave someone who depends on you burdened with debt, life insurance is a responsible purchase. And, it’s fairly cheap and easy to come by when you’re young and healthy. But what if you’ve put it off and now find that you have a serious health condition or life-threatening illness like AIDS, cancer, heart disease or diabetes? The good news is that you can still probably find coverage, but it will cost you more. It’s called impaired-risk life insurance and here’s what you need to know before you look for life insurance quotes.
Impaired risk life insurance is most commonly sold to people who have a medical condition that makes them a poor risk for standard policies, but it’s also an option for those who work in hazardous fields (roofer or independent trucker come to mind), pursue dangerous hobbies like sky-diving or frequently travel outside of the U.S. Impaired risk policies tend to have smaller death benefits and more limitations than standard issue life insurance. Minimum and maximum benefits you qualify for will usually depend on your age at the time the policy is issued.
Do not, under any circumstances, lie or misrepresent your situation when applying for life insurance. Doing so can invalidate your policy and leave your beneficiaries with nothing.
The premiums for impaired risk life insurance will depend on many factors including your age, gender, and the severity of your health problems (or the riskiness of your lifestyle choices), as well as the amount of coverage you’re seeking.
If your health issues are minor, you should try applying for traditional life insurance, but be prepared to take a medical exam and fill out a fairly lengthy application form. If you’re turned down, try for a simplified, or jet issue, life insurance. No medical exam is required but you may still be asked to complete a detailed form about your health history. They may also check your driving record and Medical Information Bureau file to verify the information you’ve provided.
Your next option is a graded death benefit policies, which can be purchased as term or whole life, generally doesn’t require a medical exam and the questions about your health and medical history will probably be fairly short. The insurer reasons that you wouldn’t be applying for this kind of policy if you could have qualified for a cheaper option. Under this type of policy, in most states, death benefits paid in the first two years of coverage will be less than the full amount you applied for. The full amount doesn’t kick in until the third year of coverage.
Guaranteed issue life insurance is another option. These policies involve no medical exam and no health questions. Just about anyone can qualify, even people with terminal illnesses. Consequently, it’s the most expensive type of coverage. Before you settle for this, you should at least try to qualify for cheaper coverage.