High-Risk Life Insurance: Is It for Me?
What is high-risk life insurance?
High-risk life insurance is any policy that covers a high-risk person who has a higher-than-average risk of passing away prematurely and triggering an early payout.
- “Risk” means lifestyle risks, professional risks, or medical risks
- Higher risk = higher premiums
“High risk” describes the policyholder, not a specific type of insurance.
- High-risk person: You may be rated “high risk” based on your application process and what you reveal about lifestyle, health, or occupational risks.
- High-risk policy: A standard policy has been adjusted via underwriting for the high risk.
Many Canadians who are considered high risk can still qualify for life insurance. The provider may charge higher premiums, add exclusions, or cap the term or coverage amount.
The best life insurance in Canada for most people is term life insurance since it’s flexible, affordable, and straightforward. Term policies offer reliable coverage for the years your loved ones would need financial protection the most.
If you pass away while your high-risk policy term is active, your loved ones will receive a tax-free lump sum known as a death benefit.
What makes someone “high risk” for life insurance?
Someone is “high risk” when their lifestyle, medical history, or occupation means they could pass away sooner than average and the company would have to pay out a death benefit early.
Lifestyle risks can include things like:
- Thrill-seeking activities like skydiving or motorcycle racing
- Unhealthy habits like smoking, excessive drinking, or drug abuse
Medical condition risks can include things like:
Occupational risks can include things like:
- Mining
- Construction
- Diving
Risk typically affects pricing rather than eligibility, though it depends on the specific applicant. Note that the above are just some examples of things that are considered “high risk”, and it will slightly vary from provider to provider.
How much high-risk life insurance costs in Canada
The higher the risk of premature passing, the higher the life insurance premiums will be—like 25% to 200% higher, depending on the increased risk factors.
When applying for life insurance as a “high-risk” individual, a provider might assess your eligibility for approval as part of your life insurance application based on these factors:
- How old you were when you were diagnosed
- Whether you’ve developed complications
- How well you’re currently managing your condition
Then, insurers will calculate your premiums using well-established industry ratings with corresponding percentage increases to your monthly life insurance cost. The ratings range from A to J or 1 to 10, with A and 1 being the lowest ratings. The higher (riskier) a condition is rated, the pricier your premium will be.
Here’s an example of a rating range:
|
Life insurance rating system for high risk applicants
Based on an example base premium of $100/month |
||
|---|---|---|
|
Rating Class
|
% Increase
|
Final Premium
|
A or 1 |
+25% |
$125 |
B or 2 |
+50% |
$150 |
C or 3 |
+75% |
$175 |
D or 4 |
+100% |
$200 |
E or 5 |
+125% |
$225 |
F or 6 |
+150% |
$250 |
G or 7 |
+175% |
$275 |
H or 8 |
+200% |
$300 |
I or 9 |
+225% |
$325 |
J or 10 |
+250% |
$350 |
Can your life insurance rating improve over time?
Not really, no. Your life insurance rating is fixed and based on your risk profile at the moment your policy is issued. As a reminder, “rating” means the risk classification assigned by the insurer, and “rate” means the cost.
If your risk profile has improved substantially, you may qualify for an improved rating (and lower price) by re-applying for a brand new policy.
You will need to prove that any risk reduction is real and stable in order to earn the improved rating. There’s no guarantee that a new application will unlock a better rating. Plus, applying for a new policy means you’ll be assessed at your current age, and rates increase with age.
To sum up, ratings don’t change within a policy—your existing premium and risk rating are typically locked in for the life of your current policy.
What if I’m “high risk”?
“You might be at higher risk, but still very much insurable. You are high risk now, but you could end up paying more for a high-risk life insurance policy in the future as you age or your condition progresses.” —Erik Heidebrecht, Life Insurance Advisor
Who is considered “high risk” for life insurance?
Jobs, medical conditions, and risky hobbies can make someone “high risk” when it comes to life insurance. Here’s a non-exclusive list for each category.
What occupations are considered high risk?
- Underground miners
- Farmers and ranchers
- Commercial fishermen
- Construction workers
- Roofing specialists
- Steelworkers
The definition of a high-risk job can change from one insurance provider to the next, so shop around and get multiple quotes to ensure you’re not overpaying for coverage.
What health issues are considered high risk?
- Crohn's disease
- Heart disease
- Organ transplants
- History of cancer
- Kidney disease
- High cholesterol
- Smoking cigarettes or cigars
- Chewing tobacco or use of other tobacco products
- High BMI
Occasional smokers may qualify for standard premiums. Learn more about life insurance for smokers.
What hobbies are considered high risk?
- Skydiving
- Scuba diving
- Bungee jumping
- Rock climbing
- Racing (boat, car, bike, skiing)
- Parachuting
- Hang gliding
Remember: A hobby is something you do repeatedly. If you’re just trying something one or twice, you generally won’t be considered high risk for life insurance.
“Being ‘high risk’ is just an underwriter classification. It doesn’t take away the probability of you getting coverage and protecting your family.” —Erik Heiderbrecht, Life Insurance Advisor
How to find the best affordable high risk life insurance
Finding affordable life insurance when you’re considered “high risk” can feel daunting—but it’s not impossible. Here’s how you can find the coverage you need without breaking your budget.
Step 1: Shop around
Insurers differ in how they treat a particular health condition in their underwriting process. Aim to get three different life insurance quotes to find the option with the coverage you need at a price you can pay.
Step 2: Manage your health condition and re-apply
Look for an insurer that will allow you to be reassessed within a year or two of buying your policy. If you manage your condition effectively and become healthier as a result, you could unlock lower premium payments in the future.
Step 3: Look for coverage with simpler approval requirements
No-medical life insurance coverage doesn’t require an extensive medical exam—but this means that the provider assumes you are high risk and will charge high premiums.
If you’re like most Canadians, term life insurance coverage is the type of life insurance that is most beneficial—and most affordable. Try getting standard term life insurance coverage first and use no-medical life insurance as a backup.
If you've been turned down for life insurance because of your health, guaranteed issue life insurance can help you get coverage without medical exams or health questions. Acceptance is guaranteed for eligible applicants, making it an option for people who may not qualify for traditional life insurance.
Coverage amounts are typically lower and premiums are higher than fully underwritten policies. But for many Canadians, guaranteed issue life insurance offers peace of mind by helping cover funeral expenses, outstanding bills, or other costs that could otherwise fall to loved ones.
If you're eligible for traditional term life insurance, it will often provide more coverage at a lower cost. But if health concerns are making it difficult to get approved, guaranteed issue life insurance can be a practical way to secure lifelong coverage.
The types of life insurance for high-risk applicants in Canada
There are three main types of life insurance that high-risk Canadians may qualify for: fully underwritten life insurance, simplified issue life insurance and guaranteed issue life insurance.
The right option depends on your health, occupation, lifestyle and insurance history. While some applicants with health conditions can still qualify for traditional life insurance, others may find that a no medical policy offers a better path to coverage.
In most cases, it makes sense to start with fully underwritten coverage and then explore no medical options if traditional coverage isn't available or doesn't meet your needs.
- Fully underwritten: Highest coverage amounts and often the lowest premiums for those who qualify.
- Simplified issue: No medical exam, fewer health questions and moderate coverage amounts.
- Guaranteed issue: No medical exam or health questions, with guaranteed acceptance for eligible applicants.
Fully underwritten standard life insurance is best for people with manageable health conditions. This type of underwriting requires more health questions, so it may be harder to get for a high-risk applicant.
Simplified issue life insurance is best for people with some health issues who are willing to answer insurer questions about their situation. There is no medical exam, so approval is generally faster.
Guaranteed issue life insurance is best for people who have been declined for traditional coverage or whose health issues would make it difficult to qualify. PolicyMe’s guaranteed issue life insurance coverage is among the best no medical coverage in Canada, with higher coverage limits than competitors.
How to lower your life insurance costs if you’re high risk
You can lower your life insurance rate by managing your risks, choosing certain policies, and applying at the right time.
- Manage your conditions: Medication adherence, stable test results, and specialist follow-ups can lead to better ratings at renewal or on reapplication.
- Reapply or reassess: You may unlock a lower quote if you apply after your health is improved, like if you quit smoking, lose weight, or control your A1C or blood pressure.
- Adjust term length or coverage: Shorter terms and lower coverage can significantly reduce premiums while still giving you coverage during the most important years.
- Don’t default to no-medical too early: No-medical policies cost more, even though they’re easier to qualify for. Start with fully underwritten options first.
High risk often means higher premiums. But there are ways for high-risk Canadians to reduce their costs over time, with the right structure and timing.
FAQ: High risk life insurance
Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors.
Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors.