Life insurance is one of those things that many of us know we should have, but often don’t get. You need life insurance if you have people who depend on your income. It’s designed to provide money in the event of your death so that your surviving spouse and any children can continue to cover expenses without your income. Life insurance is pretty affordable and widely available. There’s just one snag: If you’ve already got health problems, you may not qualify for a conventional life insurance policy. You are what the insurance world calls, “uninsurable” because you are not predicted to live long enough for the insurer to make a profit off of you. Cold, but true.
If you can’t qualify for a conventional policy, there are alternatives that will afford you at least some level of protection. None of these will be cheap – many cost much more than traditional life insurance – and this type of protection isn’t comprehensive, meaning you will receive very limited coverage. However, some protection may be better than none. Here are some types of life insurance that don’t typically require you to pass a physical.
Mortgage insurance: Many banks offer you the chance to buy insurance that will pay off your mortgage if you die. This will not pay any of your other bills, but if you carry a large mortgage that requires both of your incomes to pay, it may be worth it.
Employer sponsored life insurance: If your employer offers life insurance, jump on it. It’s likely to be your cheapest option. Most employer policies don’t require physicals, although there may be waiting periods/term of service requirements before it becomes effective. However, if you lose or leave the job, you will lose the insurance.
Credit card life insurance: Credit cards sometimes offer insurance that will pay your balance in the event of your death. If you carry extremely high balances, this may be worth it to you.
Loan insurance: Car loans and many other types of personal loans offer insurance options that will pay the loan if you die. These policies are usually very expensive and if you have a lot of loans to cover you can quickly find your insurance eating up a big chunk of your budget.
Flight or rental car life insurance: If you have a real fear of death from flying, you can sometimes buy flight insurance through airport vending machines. If your plane goes down, your heirs will get some money. Car rental agencies sometimes offer life insurance that will cover you if you die in a wreck in their car. Only you can know whether such polices are worth it to you, but they are available.
“As Seen on TV” You’ve seen those ads on TV that offer guaranteed life insurance with no physical. Most don’t offer a lot of coverage; usually just enough to cover your final expenses and maybe a little more. But if you have no other insurance, at least your heirs won’t have to worry about your funeral costs.
These types of insurance are not generally for those who can qualify for a traditional policy. If you have survivors that depend on your income but you are uninsurable, you can use these types of insurance to give you at least some protection. If you qualify for conventional life insurance, get it. It will cost less and offer more protection than any of these alternatives.