What If You Are Not Insurable Anymore?

What If You Are Not Insurable Anymore?

What If You Are Not Insurable Anymore?

This question is becoming more and more relevant today. 

Over the last few months, I’ve come across an increasing number of people who are becoming uninsurable at a younger age. They are considered high-risk for insurance companies because of a previous health condition, a genetic disorder, poor health and lifestyle habits, travel to riskier locations, professions, and other factors. 

Now one of the most common reasons that people seek out a Life Insurance policy is to replace lost income. The payout from the policy replaces the income of the breadwinner in the family. It carries the family through what is a difficult time in many ways. 

But I’ve talked about how Life Insurance comes in handy for a lot of other reasons too. People use Life Insurance as a tool for tax protection, wealth transference, protecting their business, and its key persons even and most commonly for procuring mortgages and buying properties. 

CEO’s Fund

Let me tell you about a little tactic that I took note of inside of a business I know. No matter how the company did, every month, the CEO would take out a small percentage of the income and put it into a ‘CEO’s Fund’ account.  The rest of the money would go over to the finance department, and they would manage all their budgets and expenses from what they received. 

A few years down the line, their office needed a very necessary tech upgrade, and they couldn’t afford that lump sum as an unexpected expense. 

The CEO’s Fund came to the rescue here. That small percentage that was being put away month after month had grown into a sizable savings account that helped the company sail through a cash crunch. 

That’s essentially what a Life Insurance policy is. That payout from a Life Insurance policy or Critical Illness cover comes at a time when a family’s (or business’) primary source of income is suddenly gone. But a Life Insurance policy is different in that over time it pays out a more significant sum than what’s paid into it. A savings pot will take in $5000, and when you reach back into it, it will still give you back $5000. 

A Life Insurance policy, however, depending on the type, terms, and how long the policy-buyer has been paying premiums into it, pays out a significantly more substantial sum. So, $5000 put into premiums, depending on various factors, will carry your family to a much bigger payout of say $100,000, or perhaps $500,000 or a million.  It is, dare I say, almost the best return on investment (if the worst happens). 

But if you’re in the unfortunate position where you have been rendered uninsurable by Life Insurance companies, then the savings pot might be your next best option. You still need to build up that reserve for your family, loved ones, your business, whatever, and whoever it is that you wanted to leave behind a Life Insurance payout for. That need doesn’t change because you are uninsurable – it’s just the means to how we meet that need changes. 

Most people’s Life Insurance policy expires at some point in their lives. But when planned well, it terminates at a time when their assets and investments can replace the need for Life Insurance. 

Can you get smarter with your investments?

Yes, of course. 

But the simple (and often hard-to-implement) truth is that you just have to start saving money religiously. If you still want to leave behind that safety net and don’t have the option of a Life Insurance policy, you’ll have to save harder and faster than the average person with a policy. 

Should you find yourself in this position, try and get as much time on your side as possible. 

If you need to start saving, start today. 

If you need to look into investing, do it today. 

And if you need to take charge, do it now. 

This is just another case of controlling the controllable. 

When I was 34 years old, my turning point came when my Life Insurance agency charged me twice the average person my age for a policy. I could very well have been denied coverage, too, but I decided to take the reins and reversed my health and lifestyle. 

Have you thought out Plan B if you’re not able to secure Life Insurance, or enough of it?

Leave a comment