Finding the best-priced life insurance isn't always an easy task. If there's a health problem in your medical history that raises red flags in the application process, you or your agent might want to enlist the help of an impaired-risk specialist.

Impaired-risk specialists are insurance brokers who know which life insurance companies will tend to offer the most competitively policies for applicants with certain medical conditions or even risky lifestyles. For example, some life insurers will tend to offer better rates for those with heart disease or diabetes. Other life insurers are more lenient when it comes to cigar use and tobacco chewing. And still other companies will quote better rates for nonmedical risks such as aviation, scuba diving or foreign travel.

Impaired-risk specialists are expert at knowing which life insurers are likely to give the best-available rates for these and will send your application to those insurers for rate quotes.

Unless you are looking for a lot of insurance with a face value in the millions of dollars, it probably doesn't make sense to hire an impaired-risk specialist on your own. Some large insurance agencies have an advocate on staff or an agent experienced with higher-risk applicants. Alternately, your local agent can contact a brokerage that specializes in placing impaired-risk applications with insurance companies that will have the best pricing for the medical condition at issue.

For example, Target Insurance Services, based in Overland Park, Kan., works with agents across the country who have clients with medical conditions that prevent them from getting preferred or even standard rates.

Target Insurance Services, which handles more than 5,000 applications annually, knows which insurance companies are likely to be the most lenient in underwriting a case and seeks four to five competing quotes from those insurers. With the help of an impaired-risk specialist that like, applicants who couldn't find even a standard rate quote may receive multiple standard-rate offers or even preferred-rate quotes.

"We can find coverage for the majority of applicants," says Kevin Coughlin, a brokerage sales consultant at Target Insurance Services who has 25 years of experience in underwriting. For example, says Coughlin, they can find standard or even preferred rates for applicants with depression and standard rates for most overweight folks. For example, Coughlin says a 5-foot-10-inch person weighing 215 lbs. can get preferred rates, and a person at that same height but 260 lbs. can get standard rates. But you have to know where to look.

Trends in impaired-risks

Life insurers are becoming more cautious about giving preferred rates to overweight applicants, observes Coughlin. That's because preferred rates are so good right now that insurers need to be fairly strict about handing out those rates.

Coughlin notes that rates across the board are tightening up, and the pricing that they saw two to three years ago is harder to obtain, as insurers become less aggressive.

Finding a qualified impaired-risk specialist

If your insurance agency has an in-house specialist who deals with impaired risks, there are some questions you can ask to find out what makes him qualified to handle your case.

Ask if the agency's specialist is a former insurance company underwriter. Former underwriters who work in insurance agencies are often well connected with current underwriters and have direct experience setting policy prices for those with medical conditions. Former underwriters will know the positive indicators insurers look for when trying to make the best offer. This experience will allow the specialist to put your case in the best light when he contacts an insurer.

Former managers at insurance companies, who have overseen underwriters, can also make good impaired-risk specialists. They are especially valuable if they have supervised the processing of hundreds of impaired-risk applications and are familiar with the risks involved in insuring people with medical conditions. This kind of experience can be difficult to quantify, but the very best will be members of the Risk Appraisal Forum.

Risk Appraisal Forum members, together with underwriters for insurers and life insurance medical directors, discuss new procedures and techniques with medical authorities. Forum members are familiar with how how medical advances can improve your insurability; they indirectly help impaired-risk applicants across the country by keeping underwriters and medical directors informed about advancements in longevity and mortality for medical conditions.

If your agency doesn't have a full-time specialist or a consultant, look for an agent who has experience finding life insurance for people with medical conditions. Agents who have more than 10 years of experience, or who write 15 to 20 percent of their policies for people with health problems, can be just as knowledgeable and well connected as former underwriters.

You might consider finding an agent with the Chartered Life Underwriter (CLU) designation. CLU agents have shown a commitment to learning about the business of life insurance. These agents usually have years of experience and have most likely taken courses on how to provide coverage to people with health problems.

Ask if your agent will contact an intermediary agency that specializes in finding life insurance for people with less-than-perfect health. For a percentage of the agent's commission — known as an "override" — these intermediaries will contact a number of insurers on your behalf and solicit quotes for life insurance policies. To make sure several companies are considering your application, you should ask your agent for the names of the insurers the intermediary uses.

Also, notice the questions asked about your medical history. If your agent asks several detailed questions about your health problems, it's a sign the agent or specialist is familiar with securing life insurance for people with your condition. If you aren't being asked medical questions, the agent might be planning to treat your application the same as every other, hoping for a favorable result.