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3 Ways to Buy Life Insurance on a Spouse Who’s Uninsurable

Insurance, Life Insurance
Ways to Buy Life Insurance on a Spouse Who's Uninsurable

If your spouse has been shopping for life insurance but has been turned down due to major health issues, don’t give up quite yet. There may be ways you can help.

Be prepared for the possibility that you’ll have to buy a relatively small policy. However, even a small policy can cover final expenses or provide an inheritance to family members.

Here are three types of life insurance that you can buy on a spouse who’s uninsurable by a regular life insurance policy.

1. Buy group life insurance on your spouse through your workplace.

Some employers let workers buy group life insurance not only for themselves, but also for their spouses. If this option is available, you can sign up during the annual open enrollment period.

You can enroll your spouse when you enroll yourself, and you’ll get a group rate. Your spouse won’t be penalized for health conditions.

On the other hand, workplace policies typically are small. You’ll likely be able to buy either a percentage of your own group life insurance coverage amount or a small flat-dollar amount — as little as $5,000 or $10,000.

You could also get the rug pulled out from under you. “The one major drawback is that if you do not have very secure employment, then as soon as the job ends so does the group life insurance policy,” says Jeff Rose, a certified financial planner in Carbondale, Illinois, and founder of Alliance Wealth Management.

2. Add a spousal rider to your life insurance policy.

There’s another way to let your spouse piggyback on your life insurance coverage: Buy a term life insurance policy on yourself and add a “spousal rider.” If you need coverage anyway, this strategy could make sense.

Keep in mind:

  • You might need to answer a few questions about your spouse’s health. Certain conditions may make him or her ineligible.
  • Few life insurance companies offer spousal riders, but NerdWallet did find them at Foresters Financial,  Lincoln Financial and Nationwide.

Rose also points out that “if either spouse were to pass away, then the policy pays out and no longer covers the surviving spouse. If the survivor is in bad health, then you are back where you started.”

In some cases, a spousal rider can be converted to a whole life insurance policy. Research your policy’s rules — such as whether you must convert during a certain time frame — if you’re interested.

3. Buy a no-exam life insurance policy.

Many life insurance policies require an exam and access to medical records as part of the application process. If your spouse has a serious health condition, consider a no-exam life insurance policy such as guaranteed issue or simplified issue.

As the term implies, no-exam policy applications don’t involve physician evaluations and typically ask few or no health questions. But you’ll pay higher-than-average life insurance rates for the convenience and the risk the insurer takes on your spouse.

However, if you’re looking for a small amount of coverage ($50,000 or less) and your spouse has been denied a regular policy, a no-exam policy offers an alternative.

“Guaranteed issue life insurance is going to be the most expensive option, but it is also the most flexible,” Rose says. “Because you own the policy and it is on a single person, you have full control.”

Don’t assume your spouse is uninsurable

Many life insurance companies now sell policies to people who would have been uninsurable just a few decades ago, such as breast cancer survivors. Talk to a life insurance agent first to determine whether your spouse truly is uninsurable. Good agents know which companies are the most lenient about pricing for specific health conditions.

Amy Danise is an editor at NerdWallet, a personal finance website. Email: adanise@nerdwallet.com. Twitter: @AmyDanise.


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