How to Get Life Insurance With Low Credit

If you’ve ever purchased a home, renters or car insurance policy, you know that insurance companies look at your credit score to determine your rate. The lower your credit score, the higher your rate is. When it comes to life insurance, credit scores don’t have as much of an impact on your premium. Getting life insurance with bad credit is possible. In this article, we’ll explain how to get life insurance for bad credit and how to find a cheap life insurance policy that fits your budget.

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    In this article

      Can I get life insurance with low credit? 

      Having a low credit score can affect you in many ways. Fortunately, your ability to get life insurance is not one of them. It’s possible to get a life insurance policy with a low credit score, which is typically anything between 300 and 579, according to Experian.

      Whether you want a term life insurance policy, whole life insurance policy or final expense insurance, your credit score only plays a small role in your rate. When you’re applying for life insurance, what matters most is your current health and family history of illness.

      [ Read: Whole, Universal, and Term Life Insurance: What’s the Difference? ]

      How much does my credit impact my life insurance premium? 

      Your credit score has a  minimal impact on your life insurance premium. If you have a poor credit score, you could get a slightly higher rate than someone with a great credit score. Unlike other types of insurance, it’s not a major factor. Life insurance companies put more weight on your age, overall health and lifestyle when calculating your premium.

      However, life insurance companies do look at your credit score when you apply for coverage. They’re not looking at your numerical score, but rather looking for discrepancies that your credit report shows. Specifically, insurance companies want to know if you’ve filed for bankruptcy in recent years, which is reflected on your credit report.

      [ Read: How Much Does Life Insurance Cost? ]

      If you have a bankruptcy on your record, it can make it harder to get approved for life insurance coverage, and it will definitely drive up your rate. People who have filed for bankruptcy in the past are viewed as high-risk, which is why they pay more for insurance. Most insurance companies consider bankruptcy recent if it occurred within the last 10 years.

      Why do insurance companies care about my credit?

      Insurance companies care about your credit score because they want to figure out how much risk you pose to them. Put simply, insurance companies believe that people who have a poor credit score are more likely to behave irresponsibly, which could lead to a higher likelihood of claims.

      When you file a claim, the insurance company has to pay you a certain amount of money, and it’s usually a hefty cost. Checking your credit score is a way for the insurance company to learn more about your personal risk of filing a claim. The company might decide to charge you a higher premium to offset the cost of a potential future claim if you have poor credit.

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      Will applying for life insurance impact my credit? 

      No, applying for life insurance will not have any impact on your credit score. When life insurance companies check your credit report, it’s considered a soft pull, which means it won’t have any effect on your credit.

      The only time your credit score is impacted by a credit check is when an organization runs a hard pull or hard inquiry. When you apply for a loan, for instance, most lenders will run a hard credit pull because they need to get your full credit file from the credit bureaus. Hard inquiries usually stay on your credit report for two years, but they only impact your actual credit score for several months. 

      Are there any life insurance providers that won’t look at my credit?

      There aren’t any life insurance providers that explicitly say they don’t look at credit scores. However, having poor credit shouldn’t stop you from getting a life insurance policy.

      Instead of shopping around for the best life insurance by yourself, consider working with an independent insurance agent who sells policies from more than one company. When you hire an agent, you can compare multiple life insurance policies, get help with your applications, and increase your chances of finding an insurance provider that will accept you.

      If you’ve filed for bankruptcy within the last 10 years, be sure to let the agent know beforehand. They can recommend a few companies that typically accept applicants who have a history of bankruptcies or poor credit. They can also give you some tips for improving your chance of getting approved for coverage.

      Find the Best Life Insurance

      Save money on life insurance with our simple comparison tool.

      Matching you with providers.
      We found results in
      Click at least 2-3 companies to find the very best rate.

        How can I get cheap life insurance?

        If you’re looking for cheap life insurance, improving your credit score is one way to get a lower rate. Here are some tips for raising your credit score quickly:

        • Pay your bills in full before they are due date.
        • Work on paying off credit cards and other debts.
        • Consolidate high-interest debt and move the balance to a lower-interest account.
        • Use your credit card regularly and pay it off every month.
        • Only open new accounts as needed.
        • Review your credit report for inaccuracies.

        [ Read: Five Perks of Having Good Credit ]

        We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

        Elizabeth Rivelli

        Contributing Writer

        Elizabeth is a contributor to The Simple Dollar, where she reviews insurance providers and policies. She has more than three years of experience writing for top online insurance and finance publications, including Bankrate, Coverage.com and Reviews.com.

        Reviewed by

        • Nashalie Addarich
          Nashalie Addarich
          Editor

          Nashalie Addarich is an editor for The Simple Dollar. She recently made a career switch from the legal field, where she was an attorney in Washington, DC. In her free time, she enjoys learning new languages. You can also find her editorial work on Reviews.com.