Impaired Risk Life Insurance
In this case, you may hear the term “Impaired Risk Life Insurance” which essentially states that you are at an elevated risk due to situations such as medical issues or other risk factors that make normal life insurance coverage not applicable.
There are some specific examples that would qualify a recipient for impaired risk life insurance, such as having a strong history of heart disease and having a bypass is one. However, there may be situations which are borderline and you need an expert to get you the right type of coverage.
Other factors can include working with hazardous materials, traveling outside the US and having a dangerous occupation. Obviously, if you qualify for standard life insurance you do not want to be saddled with impaired risk life insurance with is typically more expensive so seeking out an agent who simply offers life insurance, but is actually more along the lines of a home or business insurance agent is probably not the best choice.
Essentially, there are four types of impaired risk life insurance that you might qualify for depending on your circumstances.
Traditional: This type of life insurance requires a medical exam and you must fully disclose any and all medical conditions on your application form, including any appropriate medical records. While this may seem to run the risk of having more expensive life insurance, the truth is that in most cases this form of impaired risk life insurance is actually less expensive than other forms.
Simplified: Also called a “Jet” issue, there is no exam in this case. You will however have to fill out an extensive application form revealing all of your medical background and details of your health. The insurance company will then check your application against their reports from MIB and pharmacies to verify your application. This type of insurance is generally better for those with minor health risks as the rates are similar and the underwriting is quicker to employ. For those with more serious risks, this is generally more expensive than the traditional option.
Graded Death Benefit: No medical exam is required for this type of life insurance and the application is generally short than either the Simplified or Traditional. In fact, there are usually only six or so medical questions that are asked however if you respond “yes” to any of them you do not qualify and furthermore this form of impaired risk life insurance is generally more expensive than either the traditional or simplified.
Guaranteed: No medical questions and no health exam and almost anyone are qualified even if you are nearing your death bed. However, it is also the most expensive form of impaired life insurance and is usually reserved for those who cannot qualify for the previous three forms.
From these four forms of impaired risk life insurance you should be able to select the best and least expensive one if possible to cover the needs of your family.