Before we go any further the answer is "It's OK! Yes you can!" How? Some life insurance companies specialize in insuring people with health problems. Depending on the type of health problem and the degree of the problem, there are basically three ways or levels that can accomplish getting you insured.

In the first level, we can take your medical profile (it can even be done anonymously) to some specialty life insurance companies and not only most likely find an insurance company who will accept you (even if you have been turned down elsewhere), but also find you the best deal possible. For some people it will be a surprisingly good deal, for others it will be expensive, but still may be worth doing. At least it costs nothing to inquire about it.

With this first level you may qualify for the specialty life insurance company's regular product with an extra charge added on. It could be what is called a "flat extra" of so much money per thousand dollars of life insurance. The flat extra may or may not be dropped after a few years, depending on the situation. The other and more common way is to add on what is called a "table rating," which is based on what a life insurance company feels would be a persons mortality factors; or in other words what is their possibility of dying anytime too soon versus a person with no health problems.

The following charts illustrate how it works:

The Best & Worst of Mortality Factors

Chart A:

In Chart A it shows what percentage of the standard premium (price) a person would pay based on their health (or mortality factors). Look at Table 4. A person who was classified at a table 4 would pay 200% or twice the standard rate. Initially they might be heard to say "Twice the standard amount? It's not like I'm about to die, and besides the doctor said that my health problem is not really much of a concern, as long as I take my medicine!"

But there are different perspectives  going on here and they are both valid. Let's look at Chart B.

Chart B:

Life insurance coverage: $100,000 -- each person in each control group 

By nature of his work the doctor only focuses on the "# In the control group", and the "# Deceased in the 1st year". Since he is not in the insurance business, he has no reason to be concerned with how much life insurance gets paid to beneficiaries. So he logically looks only at the first two kinds of statistics found under table 4 and reasons that out of 5,000 people only 16 will die in the next year so that means his patient's chance of dying any time too soon is slim. So he naturally tells the patient that if he takes care of himself, he should be fine. 

But if the insurance company intends to stay in business it has to be worried about how much it expects to pay out to beneficiaries of the policy holders. Look at the difference in what the life insurance company had to pay out in death benefits to the families or businesses of those in the "standard" control group versus what they had to pay out in the table 4 control group. The table 4 control group cost the life insurance company $1,600,000 -- twice as much as the standard group! So it is life and it is logical that the insurance company will ask the table 4 people to pay twice as much for their life insurance policy.

Some people have a health problem for which a specialty insurance company feels is too much of a risk for their regular product even with additional premium added. That brings us to levels two and three of insuring people with health problems. For these levels there are a few kinds of specialty life insurance policies typically called "easy issue" or "almost guaranteed issue", and "guaranteed issue" life insurance. Applications for these kinds of policies do not go through a complete underwriting (health assessment) process and thus do not  require an exam and usually do not ask for your medical records.

The easy issue and almost guaranteed issue life insurance applications will usually ask a simplified list of health questions (less questions than a regular life insurance application) and if a person can truthfully answer no (or yes as appropriate) to the questions, then they would qualify. If they don't qualify, then what is left is the guaranteed issue kind of life insurance policy.

The guaranteed issue life insurance application asks no health questions at all: only name, age, address, etc.; if a person gets that right, they qualify! Even if they have previously been told they were "uninsurable". Hopefully you're thinking that there must be a catch. You are right, there is! But at least the catch is not that for the policy to pay off you have to die on a Thursday morning in the winter while facing north on the east side of a street during the term of an honest politician.

The actual catch is a bit simpler than that. It is that the policy will have what is called a graded death benefit. At first the policy may only cover accidental death. Then after a year or two a certain percentage of the death benefit may be available to cover any kind of death. Depending on the policy, within two to five years 100% of the death benefit will be available as normal "death by any means" coverage. In addition, with many policies, during the first year or so, if you die by natural means and the policy was still in the "death by accident only " phase, then at least your beneficiary would receive all the money you paid in plus interest, so you can't lose!

There are two more things to understand about easy issue, almost guaranteed, and guaranteed issue life insurance. First that many policies limit the amount of coverage you can apply for. Usually from between $10,000 to $150,000 -- it varies depending on the insurance company and the type of policy. The good news is that if you do want more coverage than what is allowed under one policy, you can get increased coverage by applying for several policies, each with a different life insurance company! Also, at times there are policies available that will allow for a substantially higher amount of coverage. In either case, we can help you obtain coverage!

The second thing is that of course the life insurance company knows that only people with health problems will apply for these kinds of policies, so higher charges are already built into the policy from the beginning.What does help keep the cost down is that the life insurance company doesn't have to spend money on verifying your health (underwriting costs), and so that makes it more affordable in spite of everything else.

Another service PGA Financial provides is that it has guide books that help a broker know how to proceed in a given situation. They explain different health problems, and depending on the degree or severity of the problem the guide book gives an idea of the probable outcome (as it concerns being accepted for the life insurance). It is still only a guidebook and is not the ultimate authority, but it does help a lot in saving time and effort to get a person as good a deal as is possible!

If you would like to find out what life insurance you could get and how much it would cost, please submit the following form:

Licensed in:
Arizona, California (license #0629626), Texas, and Virginia. For other states, inquiries are referred to agents licensed to handle insurance in that particular state.

PGA Financial has no intent to generate interest in any particular life insurance company or specific policy, but rather to inform and educate you on the general concept -- after which, if you are interested, a broker at PGA Financial will be glad to research companies that offer such plans, get you a quote and assist you in making a choice. If you do become interested and obtain a policy, the broker would be compensated by the insurance company.

© 1998 The PGA Financial Co. All rights reserved.