How to find life insurance if you have a health condition

By Maryalene LaPonsie on August 18th, 2011

Impaired riskIn a bit of irony, those who are most likely to benefit from the financial protection afforded by life insurance are often the least likely to be eligible for coverage. Life insurance companies prefer to insure individuals who pose little risk of filing a claim, and many individuals with health problems see their applications declined. In these cases, an impaired risk specialist may be able to help you secure the coverage you need.

How life insurance companies rate risk

When a life insurance company receives an application, it goes through a process called underwriting. Each company creates its own underwriting standards but most take into consideration the same factors. According to J.D. Power, insurers may consider information such as your cholesterol, blood pressure, alcohol consumption and weight when deciding whether you are insurable. In addition, the finance site Investopedia says companies often use propriety formulas to determine an insurance score that is also used to calculate rates.

While most companies use the same information when considering life insurance applications, each may place a different weight on these factors. Essentially, the company is trying to determine how likely it is that you will die during the coverage period. Some insurers use more conservative estimates which can affect the insurability of those with chronic conditions or serious illnesses.

Using an impaired risk specialist

If you have health problems that could impact your ability to buy life insurance, an impaired risk specialist may be able to help. These individuals are insurance brokers who work to match high risk clients with life insurance companies that have more favorable underwriting guidelines. For example, the American Diabetes Association reports some carriers specialize in selling policies to those with chronic conditions. A good specialist will know who these insurers are and which are most likely to approve your application despite your health history.

There are a number of health conditions that may result in a life insurance application being denied. Among the conditions impaired risk specialists address:

  • Obesity
  • Cancer
  • Heart Disease
  • Diabetes
  • Alcohol or drug abuse
  • Hazardous occupations or hobbies

As medical treatments advance, Kiplinger's Personal Finance reports some carriers are becoming more inclined to cover conditions, such as cancer, that would previously have made an individual untouchable by most companies. In addition to locating a carrier for life insurance coverage, impaired risk specialists may act as advocates on behalf of their clients for lower premiums should the health condition be well managed.

Finding an impaired risk specialist

The first place to look for a specialist is within your current insurance agency. Many firms employ in-house specialists to help clients who are considered high risk. If possible, see if you can be connected with a specialist who previously worked as a life insurance underwriter. These individuals will have the experience and insight to know how to play up the positives on your application and minimize the impact of your health condition.

If your insurance agency cannot provide a qualified impaired risk specialist, you may have to search for an independent broker or agent. You can search for a listing of insurance agents in your area on the National Association of Insurance and Financial Advisors website. While not all these agents may act as impaired risk specialists, this list gives you a place to start your search.

To get the best deal on your life insurance, look for an agent with at least 10 years experience working with high risk cases. Agents who have 15 to 20 percent of their policies written for those with health conditions may also be effective impaired risk specialists. However, any insurance agent working with you will need access to your medical records to ensure they fully understand your situation. If an agent doesn't mention the need to review your file, that could be a sign they don't have extensive experience as an impaired risk specialist.

A health condition doesn't have to keep you from buying life insurance. With the help of an experienced impaired risk specialist, you may find the coverage you thought was out of reach is actually accessible.

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