What is impaired risk life insurance?
If you’ve ever heard the term ‘impaired risk’, or ‘impaired life’, in relation to life insurance, you might be wondering what it means? More importantly, you might want to know what it means for you in terms of obtaining life cover, and whether it makes you uninsurable.
Impaired risk refers to any life insurance applicant who doesn’t meet the insurer’s criteria to obtain the most affordable rates. ‘Impaired’ signifies that you’re a higher risk and therefore more difficult to insure.
If you’re classified as an impaired risk, the insurer has decided that because of certain factors, you’re statistically more likely to make a claim. As a result your monthly premiums will be more expensive.
In the vast majority of cases, however, this doesn’t mean that you’re uninsurable. Many insurers specialise in offering impaired life policies, so being labelled with this term doesn’t mean you won’t be able to get competitive quotes.
At Reassured, 45.2% of customers who have been declined before for life insurance, get accepted with us.
Impaired life insurance is handled differently by different insurance companies and premium prices can vary. Some may ask more questions: others may ask for access to your medical history. In some cases, you may be asked to go for a medical assessment in order to satisfy the insurer.
If you have been classed as an impaired risk, but are generally in good health, going for a medical is a good way to reduce your premium, as it will reassure your insurer that you are fit and well.
Who is classed as impaired risk for life insurance?
There can be a number of reasons why insurers may class you as an impaired risk, including:
- Medical impairment: People who have pre-existing medical conditions, such as diabetes, heart problems, severe depression, epilepsy, cancer or a history of drug and alcohol abuse. Those with a family history of health problems, smokers and obese people may also fit into this category
- Dangerous occupations: People who work in a job where there is more risk of death are likely to be classed as impaired risk. This includes those in the armed forces, people who work at height, as well as those involved in handling heavy machinery
- Sports professionals: Some sporting professionals will find they are a higher risk in the eyes of insurers also. Equestrian sports, motorsport and water sports professionals will find they face higher premiums as a result
- Dangerous hobbies / Extreme sports: Even if you don’t play sport professionally, your lifestyle can impact your life insurance. If you enjoy extreme sports, such as snowboarding, scuba diving, parachuting or bungee jumping it is very likely you will pay more for your premiums.
How does impaired life affect your policy?
For many years, people who were classed as a high risk to insure would have been point blank refused life insurance cover. However, the modern insurance market is accustomed to making provisions for all sorts of individual circumstances.
Some insurance companies have strict underwriting policies which means they will not insure impaired risk applicants, but others are more flexible, with some even specialising in these policies.
The main impact your classification as impaired life will have on your policy is the amount you pay for your premium. As you are a greater risk to the insurer, you’ll pay a greater amount for the same level of cover as someone who is not impaired risk.
Things to consider with impaired life cover:
- Applicants classed as impaired risk will pay more for their premiums
- This does not mean impaired risk applicants are uninsurable
- Undergoing a medical could reassure your insurer and reduce your premium
- Impaired quotes can vary, as insurers employ different underwriting criteria
- This is not a savings policy and there is no cash in value
- Cover will end if you don’t make your monthly premium payments.
Talk to our Reassured consultants on 0808 168 2025 about impaired risk life cover and let us search the market to find you the best quotes. Alternatively Start Your Quote online today – it only takes 2 minutes.