Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 28, 2009

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1. Group insurance. Often employers provide group life insurance to their employees as a fringe benefit. At large firms this is done without any individual underwriting as the insurers base their assessment on the ages and health history of the overall employee population, assume that only reasonably healthy people are working, and as to new people, that insurance is secondary to employment, thus reducing potential adverse selection. Sometimes an employee can increase the amount — particularly on “cafeteria plans” — usually during an “enrollment window” at the annual election time.

2. Credit life insurance. If you finance a new car, or have a credit card, the banks, finance companies and card issuers love to sell optional insurance on the outstanding balance. (They earn huge commissions on it.) While that optional credit life insurance is reasonably expensive, dollar for dollar, compared to regular life insurance, as there are no health questions asked this is, for someone ill, a possible option. Perhaps he should buy a new car, finance it, and take the optional life coverage.

3. There are certain plans of “senior insurance” that are advertised on TV and by mail that claim to do no underwriting at all. “You can not be refused.” The plans sometimes are called “modified life”. But these companies are not that stupid either. What’s the catch? There is NO death benefit if the death occurs within 2 years, and the policies are typically issued only for reasonably low face amounts. The companies issuing this also charge a price per dollar of coverage that is very high compared to ordinary life insurance. They also hope that those who are sick and sign up die within the 2 years, and they make their money on the fact that its “convenience” attracts many people who are relatively healthy and don’t realize there are lower cost alternatives for healthy people.