Life Insurance is designed to take care of one’s dependents after death… So why is it that you can not obtain Life Insurance when you need it most? Simply put, you need to be in reasonably good health to purchase most types of life insurance products.
It may seem logical to ask: Why can’t I get life insurance if I’m dying? Let us look at an example to understand the answer to this question.
Say you make $50,000 a year, and have $3,000 in your savings account. You have a $200,000 term life insurance policy that costs you $38.00 per month. [Now if something were to happen to you – your family has $200,000 to live on instead of only the $3,000 in your savings account.] The life insurance company has this $200,000 to give to your family because they have collected $38.00 per month from similar people who did not die, therefore the insurance company can afford to pay the $200,000 to your heirs.
Now let us assume a life insurance company sells $200,000 life insurance polices to high risk – terminally ill people. The company realizes the high probability of paying out the $200,000 on many policies. In order for the insurance company to be able to pay out on several $200,000 policies they would need to collect some crazy amount like $50,000 per month from a lot of similar people, knowing that only a few will survive.
This example shows you, the more unhealthy the group is … the more the insurance company will need to charge each person in the group.
Most life insurance companies do not offer high risk life insurance policies. This is why you need to be reasonably healthy to get a life insurance policy.
This is also why we are so passionate about Life Insurance. My heart drops when someone calls to ask about life insurance for their husband because he just received 4 stints in his heart and has diabetes -or- My Aunt needs life insurance because she has been diagnosed with a tumor. Usually(not always) by then it is too late to be accepted by the life insurance company.
Note: This blog is designed for general information purposes only. All information presented on this site should not be interpreted as legal advice and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information. For legal and tax advice contact your attorney or tax adviser.
Rita Sollie, Direct Insurance Representative with North Coast Life Insurance Company (NCL). No gimmicks or schemes here, just genuine and honest service. We don’t sell insurance, we solve problems. I welcome the opportunity to show you what NCL can do for your Life Insurance and Financial needs.
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