Chances are you have come across the term impaired risk. Impaired risk basically refers to high risk insurance applicants due to certain reasons that make them difficult to insure. It also entails a higher premium because the conditions of the applicants prevent them access to the most inexpensive insurance rates out there.
Impaired Risk Classification
As mentioned earlier, there are several reasons why an applicant is considered impaired risk. Some of these reasons include the following:
- Pre-existing medical conditions.
Applicants with a history of serious health concerns such as cancer, kidney ailments, and heart illnesses are considered high risk. Drug and alcohol abuse and obesity can also be considered high risk.
Professional athletes may also be categorized as impaired risk by insurance companies. Even a person who engages in extreme sports for leisure can still be considered as a high risk applicant.
- People with dangerous jobs.
We are talking about individuals who work in hazardous conditions like military personnel and construction workers.
Benefits of Having Impaired Risk Life Insurance
While, yes, the premium of this type of insurance is higher than your regular insurance, there are several benefits of getting one.
- It covers pre-existing conditions
This you will definitely not something you’d receive in a normal insurance policy. Before, insurance applicants with history of serious illnesses and risky lifestyle are immediately rejected. This is no longer the case if you opt for an impaired risk life insurance.
- Wider options
One of the benefits of having impaired risk life insurance is that it has a wider range of coverage compared to a standard policy. You can definitely have it tailor fit your needs as well as your financial capacity.
- Value for your investment
Contrary to popular belief, an impaired risk life insurance is not completely out of reach budget wise. Several companies do focus on this particular type of insurance so they offer competitive packages that you can choose from.
- Tax efficiency
As with other policies, an impaired risk life insurance gives tax benefits to the policyholder. Since the premium is relatively higher, the tax benefit is also bigger as compared to a standard insurance plan.
- Security and safety
No matter how dangerous the occupation or how serious the illness is, you can be assured that you would get compensation in case of a loss. That would give anyone a sense of security and safety knowing that those who are left behind do not have to be burdened by financial dues when a loved one passes away or succumbs to a critical illness.
As expected, the major difference between an impaired risk life insurance and regular policy is the premium. The good news is that with a highly competitive insurance market specializing on impaired risk, it would not be a problem for you to find a package that provides ample coverage without breaking the bank.
Getting an impaired risk life insurance may be the best thing that you could go for. Consult your insurance adviser to find the best policy for you or a loved one.
Written by the Paul Long Agency, an impaired risk life insurance company.