What Is Impaired Risk Insurance?
Painted with a broad brush impaired risk is really talking about any life insurance applicant that doesn’t
meet all the criteria for preferred plus rates, the best rate class available. More specifically Risk Life
Insurance defines impaired risk as any health risk that, in the hands of a cookie cutter agent or company,
ends up with a less than satisfactory approval or a decline.
Impaired risk life insurance underwriting is all about weighing risk, really mortality risk. At Risk Life we constantly
study companies and their underwriting decisions because at the heart of a good impaired risk
insurance company is a philosophy of clinical underwriting. Clinical underwriting is the ability to look at
an applicant with, say, type 1 diabetes, and by studying their track record of compliance with treatment,
control of their diabetes and avoidance of the collateral health issues that come with type 1 diabetes,
come to a conclusion that is different than the average of all type 1 diabetics. Simply put they look at
you as an individual, not as part of a group.
Impaired risk life insurance is defined differently and approached differently by each life insurance company. By far
the majority of them have impaired risk life insurance underwriting guides that take all of the guesswork and the
fairness out of the process. The underwriter simply flips to type 1 diabetes and sees that the company
stance is to decline them, and he does. When the underwriter is working on a case of treated situational
depression he sees that the company can go standard rates unless the depression has gone on for two
or more years. In that case it becomes chronic depression and is rated higher than standard or declined.
We call this the bucket underwriting method. If you have a health condition and take great care of
yourself most companies throw you in the same bucket as someone with the same condition that does a
horrible job of managing their health.
Risk Life’s success in the impaired risk insurance field is due to our choice of companies and underwriters and
never favoring one company over another. We shop every case, even the simplest. This is where so
many agents and agencies fall short. They think what happened once will happen every time they
present a similar case, but companies change and underwriters move on. The best impaired risk
underwriting and success is a moving target and shopping is the key to a successful application.
You may be asking yourself why you got declined for life insurance and the truth lies in an all too sad
statement about life insurance agents. Very few know how to succeed with an impaired risk insurance case and
your chances of finding one of those few, just by chance, are slim at best. The bad news is there are so
few. The good news is there are enough to get the job done just like we do at Risk Life.