High-risk life insurance refers to coverage reserved for people rated as high-risk. These applicants have a far greater mortality risk, because of an underlying health issue or a dangerous job or hobby, than the average person and, as such, do not qualify for traditional life insurance products.

Life insurance companies charge high-risk applicants much higher premium rates than others. Many times, the maximum coverage amount available is also severely capped, making it essential to consider life insurance costs and explore flexible options for managing these expenses.

Health conditions that are considered high risk

When you apply for a life policy, insurers and the life insurance company are likely to focus on health conditions that affect longevity. It is crucial to have adequate insurance coverage, especially for individuals with high-risk health conditions. If you have an illness or disease not mentioned on the life insurance application, you can safely assume it is not a high-risk condition in the eyes of your insurer.

Shared ahead are the names of a few health conditions often considered high-risk by insurance underwriters. If you have any of the following conditions, you are likely to be asked to provide detailed information upon application.

Cancer

A cancer diagnosis may be a red flag on your application, but it does not completely exclude you from life insurance. Getting a new traditional life insurance policy while undergoing cancer treatment is almost impossible, but you have a good chance if your diagnosis was given more than two years ago, and you have been stable since.

Every life insurer treats a cancer diagnosis differently. Some providers will consider you for a policy if you have been cancer-free for at least two years. Some others, however, require you to be cancer-free for longer, like 5 or 10 years.

If you are currently in cancer treatment and do not want to wait to apply for life insurance, consider buying a guaranteed issue life plan. A guaranteed issue is a small permanent life insurance policy that does not involve a medical underwriting process. So, you can qualify regardless of your health. However, keep in mind the payout is rather small— up to $25,000 or $50,000 — and there is a waiting period, too. If you die from a natural cause within the waiting period — typically, two years — your beneficiary will receive the premium dollars, plus interest, but not the death benefit.

Congestive heart failure

Congestive heart failure is a medical condition in which the heart stops functioning as well as it should. Despite the name, heart failure does not imply that the patient’s heart has literally stopped working. There are various life insurance options available for individuals with congestive heart failure, catering to different needs and circumstances. Nevertheless, the condition can seriously impact longevity, with estimates suggesting only about 30% of patients survive 10 years. For this reason, a congestive heart failure diagnosis typically disqualifies you from traditional life insurance. Your only option is likely to be a guaranteed issue policy.

Dementia

More than 747,000 Canadians are presently living with Alzheimer’s or some other form of dementia. Whole life insurance can be particularly beneficial for individuals with dementia due to its cash value accumulation and guaranteed death benefits. The average survival time for dementia patients is roughly four and a half years, although the life expectancy of someone living with dementia depends on several factors. These include the type of dementia; its severity at the time of diagnosis; and the patient’s age, gender, and overall health.

However, because it is incurable and seriously shortens the life span, insurance carriers do not offer a traditional life insurance policy to dementia patients. You can get guaranteed issue life insurance, though. It does not require a paramedical exam or ask any health questions, so people with serious health conditions, like dementia, can get coverage.

HIV/AIDS

Historically, people with HIV or AIDS in Canada have been excluded from traditional life insurance, but this is changing. Universal life insurance offers flexibility and significant investment potential, making it an attractive option for individuals with HIV/AIDS. Thanks to medical advancements, patients now can manage their condition much better. As such, some Canadian life insurers have started offering life insurance policies to those diagnosed with HIV or AIDS.

For example, in 2016 Manulife became the first Canadian life insurer to accept applications from HIV-tested individuals. If you have HIV and are between the ages of 30 and 65, you can buy life coverage of up to $2 million. Keep in mind that if you qualify, you will be charged a higher premium rate than someone who does not have HIV.

Sun Life is another life insurance company in Canada that sells life insurance to people living with HIV. If you meet the criteria, you can get coverage of more than $3 million. And HIV-positive individuals who do not qualify for traditional life insurance coverage have the option of buying a guaranteed issue. Since it does not take into account the applicant’s medical history, virtually any person can obtain it, as long as they are not over a certain age.

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Heart Attack

A heart attack is a frightening and often eye-opening experience. And as a survivor, you may wonder: “Is it possible to get life insurance after a heart attack?” Term life insurance is often an affordable and flexible option for heart attack survivors, offering customizable coverage periods and cost advantages.

The answer is yes. What type of coverage you can get depends on several factors, like the severity of the heart attack, your age, your overall health, and the amount of time that has passed since the event.

You will always be able to purchase guaranteed issue coverage because it does not involve any medical underwriting. In some cases, you may also qualify for simplified issue life insurance. Simplified issue policies do not require a paramedical, but you will have to answer a few health questions to prove insurability. Some plans, like guaranteed issues, come with a waiting period — usually two years. Compared to guaranteed issue policies, the simplified issue is less expensive and offers bigger death benefits.

In a few cases, you may even qualify for a traditional life policy, especially if the heart attack occurred a long time ago, your condition has been stable since, and you are in good health. However, note that you are likely to receive a higher premium rate than someone who does not have a serious underlying health condition.

Stroke

A stroke is a serious medical event, so it is not surprising that life insurers consider its survivors high risk. All the same, that does not mean a stroke disqualifies you from high-risk life insurance.

When determining how much life insurance coverage is needed for stroke survivors, factors such as individual financial needs, debts, and income replacement should be considered. Whether or not you qualify for traditional life insurance coverage and how much death benefit you receive depends on several factors. Such as, how much time has passed since the event, the severity of your stroke, and your overall health.

If you have had a stroke more than 12 months back, did not suffer any permanent paralysis from the event, and are in reasonably good health, you may be able to apply for a traditional life policy. Some Canadian insurers offer simplified issue plans to stroke victims after one or two years. So, that is another option that you can consider. And if you do not qualify for either a traditional or simplified issue policy, a guaranteed issue can help you cover the end-of-life expenses or leave a small legacy to your loved ones.

No Medical Life Insurance for High Risk Applicants

No medical life insurance is exactly what its name suggests: a life insurance product that does not require a medical test. Broadly speaking, there are two types of no-medical life plans —simplified issue life insurance and guaranteed life insurance.

A simplified issue lets you forgo a medical exam, but you will have to answer a few health questions. The insurer will evaluate your insurability and determine your premium rate based on your answers. If insurers think you present a lot of risk to them, they can deny your application.  

Guaranteed issue, by contrast, neither requires a medical test nor asks health questions. And the coverage is guaranteed to those who meet the age requirement.

What are the benefits of no medical life insurance?

No medical life insurance can be a great option in certain situations. Some of its biggest advantages are:

You can purchase life insurance even with health issues

Certain health conditions, like cancer, can prevent you from accessing traditional life insurance products. If life insurers have classified you as high-risk life insurance and are not willing to write you a traditional policy, you should consider no medical life insurance. Because these policies let you forgo a medical exam, you can get approval even if you have a medical condition.

You can get speedy approval

Life insurance is not like buying a smartphone. You cannot simply walk into a store, pick the product you like, and walk out. This is because life insurance rates are unique to the applicant and not everyone who wants a policy, gets a policy.

Life insurers check your insurability and determine your rates through an underwriting process. It either involves both a medical exam and a few health questions or one of the two. In some cases, a provider may even decide to request an attending physician statement — a summary of your medical history from your physician's point of view. As you may guess, all of this takes time. Generally speaking, traditional life policies can take anywhere from four to six weeks for approval.

In contrast, no medical plans are often approved within a few days, sometimes even the same day. So, if you need life insurance quickly, a no-medical policy is your best option.

You can get coverage even with a dangerous job

What you do for a living can affect your insurability. If you have a high-risk job, getting approved for traditional life insurance coverage from the life insurance companies may prove impossible. Your only option in such a situation is high-risk life insurance.

So, what is considered a high-risk occupation?

From your insurer's point of view, any occupation that increases your mortality risk is dangerous. If people in your line of work on average have a much lower life expectancy, insurance carriers may only offer you no medical coverage.

You can use it to cover the funeral cost

Did you know that an average funeral can cost up to $10,000? If you do not want your loved ones to shoulder the expense, consider buying a high-risk life insurance policy.

However, you do not need to take out a million-dollar policy to cover funeral costs. A small permanent life insurance policy with a death benefit of $25,000 or $50,000 is enough to cover burial costs and final medical bills. Since few traditional plans offer such small payouts, consider no medical life insurance.

Best no medical life insurance policies in Canada

Should you buy the simplified issue or a guaranteed issue? The answer depends on your unique situation.

You are young and healthy but need life insurance quickly

Some Canadian life insurers offer sizable simplified issue plans for young, healthy applicants at rates similar to those of medically underwritten policies. Consider such a high-risk life insurance policy with the right life insurance company if you are in your late 20s or early 30s, have no underlying health condition, and need a life insurance policy within a few days.

You have a serious underlying medical condition

If you do not qualify for a traditional life insurance policy due to poor health, try simplified issues first since it is more affordable and offers more coverage than guaranteed issues.  

You need to cover funeral expenses

A guaranteed issue plan will suit you better, as the maximum coverage is $25,000 or $50,000 and acceptance is guaranteed.

Conclusion

Poor health can make accessing life insurance difficult, but you are not without options. If you find yourself in such a situation, consider high-risk life insurance. It is designed especially for those with a higher-than-normal mortality risk, either because of a serious health condition or a dangerous job. However, you are likely to receive higher premium rates than other applicants. The maximum death benefit available might be low as well.

Speak to a Dundas Life expert to discuss your options and choose the right life insurance policy and the right insurance company for your unique situation.