I'm researching life insurance for a 55 year old female relative who lives in California. A smoker since her 20s and a very heavy smoker for the past 7 years or so, her health is not ideal but at least she hasn't been diagnosed with a terminal illness of any kind. What kind of life insurance is best in this situation? No exam, or with exam? A fairly large policy and cost effective premiums are important.

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    Considering her old age and her smoking habits, the premium isn't going to be cheap.
    – DumbCoder
    Sep 20, 2016 at 16:05
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    Does this person have access to an employer plan that includes voluntary life? Does this person have a spouse who has access to an employer plan that includes voluntary spouse life? There are a few options for small benefit term policies with little/no underwriting. Google guarantee issue life insurance.
    – quid
    Sep 20, 2016 at 16:25
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    Any hint why she needs such a "fairly large policy"? Are there young children? Other obligations? Sep 20, 2016 at 17:35
  • What is fairly large? What does health not ideal mean? Diabetes? Does she need the life insurance to support someone else? That's really all it's for. You can get a quote from online insurance company/brokers by filling in the details, however if they do a bloodtest or exam and find big issues then it will obviously be higher. Sep 20, 2016 at 23:37
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    @DumbCoder - since when is 55 "old age"? <g> Sep 21, 2016 at 12:29

2 Answers 2


Although rated (meaning high premiums), it is likely that life insurance will still be a great deal. I would stick with a level term policy for the period that it is needed. This of course gives rise to the question what is the insurance needed for?

For example it could be to cover a mortgage. Assuming this person is a significant contributor to the mortgage payment, and that there is 20 years left on the note. I would sign up for a 20 year level term policy for the current amount of the mortgage.

I would use an independent online broker such as Zander or Select Quote. I found slight better rates with the former.

Often times agents will push a person to a whole life policy (universal life is a kind of whole life) saying that the premiums will remain the same for as long as the policy is in force. However, under the hood, you actually have an annual renewable term (ART) policy and a savings account. Given this person's habits, the ART will increase at a startling rate, and the savings account pays little or no interest. There are much better options available to the educated.

If you are a glutton for punishment you could compare the two by contacting an agent. Expect the whole life policy to be about 10x more expensive. Also expect the agent to do his best to sell you on the whole life policy. You run the risk of falling for what is not much better than a scam.

So really the most important question to ask is: What financial hardship will be caused by this person's demise? Then: How can this be mitigated with planning, investing, and insurance?

The most important thing to understand is that if you talk to a traditional life insurance agent they will always recommend a form of whole life as that is how they make their living. The second most thing to understand that whole life is almost always the wrong choice.

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    +1 for Zander, I used them to get policies for both my wife and I and found them to be reasonable. You just have to dig through the options the present.
    – homer150mw
    Sep 20, 2016 at 18:55
  • When you talk to ANY salesperson, they have THEIR (own/employer/company) best interests in mind. You are lucky when your own interests come second. Sep 20, 2016 at 19:54

The first step is to get clear in your mind what the "insurance" is actually for. In what circumstances do you need (note, "need" not "want") it to pay out, and how much do you need it to pay out?

If you are insuring against some event which has a known end date (paying off a loan, paying for your kids to complete their college education if you die young, etc) then "whole life" insurance is almost certainly not the most cost effective option, though it is what insurance companies will try to sell you because it makes the most profit for them.

In fact "whole life insurance" is a classic example of oxymoron, unless you have reason to believe that you may be immortal. Financially effective insurance is about balancing the chance of something happening against the cost of it happening, and using those two numbers to decide what premium you should pay. Since it is certain that everybody will die eventually, on average "whole life insurance" is really a rather poor type of investment scheme, unless you are unlucky enough to fall under a bus the day after your policy starts! The reason it is a poor investment scheme is because it is completely non-transparent what the insurance company is actually doing with your premiums - except for taking a large slice of them every year as profit for the insurance company itself.

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