How does High Risk Life Insurance Work?

High risk life insurance policies are those written for individuals who represent an adverse risk to an insurance company. This includes individuals who are suffering from the AIDs, a person who recently underwent heart by-pass surgery or a cancer survivor who recently went into remission. These insurance risks individuals are usually declined for insurance.

How High Risk Life Insurance Works

High risk life insurance works like other forms of life insurance. When death occurs, a policy benefit equal to the face amount of the policy is paid to the designated beneficiaries. The only difference with high risk life insurance however is that when death occurs within a predetermined period, the benefit might be limited to the premiums paid.

For example, if someone dies after 5 years of the policy, and that death was related directly to the high risk condition, the benefit might be limited to the amount of premiums the insurer paid.

Offering High Risk Life Insurance

The insurance company that offers high risk life insurance is well informed about the nature of the risk. The company knows that certain behaviors will determine the survival of people with AIDs or cancer or diabetes and as such are willing to offer life insurance coverage. The premiums for these policies are much higher than a comparable non-high risk life insurance policy in order to account for the nature of the risk.

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