Life insurance providers assume plenty of risk in offering affordable policies, so they need precision in their decision-making. Insurers perform exhaustive reviews of their clients’ health backgrounds, considering factors such as age, lifestyle, health-related habits, and gender.
With more information, they make better approval decisions, fine-tune coverage limits and set appropriate premiums, reducing loss while maximizing value. Coverage providers are so thorough that they almost always look beyond individuals to find indicators of health issues and life expectancy.
Genetics plays a major role in determining susceptibility to severe health issues, and family history is subsequently a vital priority for insurers. Life insurance companies look at your immediate family to see if there is a history of genetic disease.
They closely review your parents’ and siblings’ health histories, researching what diseases they suffered from and at what age they died. If underwriters find red flags like cardiovascular disease, cancer, or diabetes, they may raise your premiums or deny coverage entirely.
If you have a clean bill of health, family history affecting your life insurance options can be frustrating. Thankfully, family health issues do not always significantly impact your eligibility. As you research your coverage options, it is crucial to understand how family history can affect your ability to get life insurance so you can make more informed decisions.
This article will cover family history details that insurance providers review and what this could mean for your life insurance options. By understanding the insurer’s perspective on family history, you’ll know how to discuss your options and avoid unexpectedly high premiums.
Why Do Life Insurance Providers Look at Family History?
Insurance companies need to reduce risk as much as possible to avoid losing money. They have to charge more money to offset the potential payout if you die while you have coverage. This is why they look at your age, gender, smoking habits, and numerous other personal characteristics — they need to estimate how long you will live.
It may seem unfair, but insurers have to consider family history because of genetic predispositions. Heredity can tell a crucial story and reveal key predictors about your chances of getting sick. No matter how well you take care of yourself, certain diseases may be unavoidable simply due to genetics, such as:
- Breast cancer
- Heart disease
- Skin cancer
- Parkinson’s disease
The list of hereditary diseases is long to list, so it’s possible you will have connection to a significant ailment. However, having an illness in the family does not necessarily ensure a higher premium or difficulty in getting coverage. Providers use a number of criteria to assess the risk posed by your family history.
What Do Insurance Companies Look For in Your Family History?
Insurance companies limit family history to your parents and siblings. In your initial application, insurance providers ask if any member of your immediate family has a diagnosis with or died from illnesses like cancer or kidney disease.
If you say yes, insurers will ask for details and clarification on several points, including the following:
- At what age did the afflicted family member become diagnosed with the disease or died from it?
- How many family members suffered from the same genetic disease?
- If they had cancer, what kind of cancer was it — ovarian, skin, testicular, breast, etc.?
Answering these questions determines whether your premiums increase or not. When your application submits to underwriting, you will have an in-depth interview, digging even deeper into your family history. They will ask for specific details regarding cases in your family to make the best determination.
When Family History Matters
A significant genetic disease in the immediate family can seem like a cause for alarm. Fortunately, the most important factors still deal specifically with the policy seeker, and much of it is in your control. If you are in good health and relatively young when applying, providers will be more generous whether there is a family history or not.
In many cases, genetic diseases in the family may also not factor into a life insurance policy decision at all. The age at which a family member has a diagnosis or died can have a huge impact. For most insurers, if the family member has a diagnosis after 60 – 65 years of age, that instance will not count against you.
The prevalence of a disease will also carry weight. If parents and siblings suffer from a common genetic disease, insurers will likely factor that in heavily to get your rates. However, if only your sister develops a hereditary disorder, they may not consider that instance at all.
The characteristics of the applicant consider relative to the risk of the particular disease in the family history. For example, a history of testicular cancer, no matter how common, will probably dismisses entirely for a female applicant.
The applicant’s age is important as well. Although there are numerous benefits to getting life insurance as a young adult, many individuals wait until much later in life before opening a policy. After a certain age, usually between 60-70 years old, most life insurance providers will not look at family history in calculating your rates.
Differences Among Life Insurance Providers
Insurers vary in how they assess family history and use it to calculate your life insurance premiums. For example, Company A may look at family members with health conditions under the age of 70 while Company B may set the threshold at 60 years old.
Insurance companies may also consider relationships differently. One company may consider everyone in your immediate family while another may only look at your parent’s health history. These are all critical distinctions considering when shopping around, especially when your personal health, lifestyle, and habits weigh similarly between insurers.
What Should I Do to Address My Family History?
If there is a significant history of genetic disease in your family, it can seem advantageous to withhold that information in your application. However, avoiding higher rates through omission can cause serious issues during your coverage period or when death benefits disburse.
When your application goes to underwriting, insurance companies will access available family medical records whether you disclosed issues or not. Initial quotes will be way off target as insurers will likely come back with much higher updated rates. Too much missing information can even cause certain insurers to decline your application altogether.
Lying about family history also puts your family or other beneficiaries at risk. Life insurance companies review medical history during the application but also when you die.
If you fail to disclose your family history and your application approves, the insurance company may find that information when you die. In these cases, the death benefits may lessen or completely denied. As a critical component of estate planning, losing life insurance benefits can leave your family in an unexpectedly difficult financial situation.
It is always best to be honest and upfront about any family medical history on your applications. Family history is not the only factor insurers look at and it is often not the most important. For many applicants, a family history of illness does not remove their chances of getting valuable and affordable policies.
Remember that insurance companies are all different, and some will give better rates than others if a family member died or suffered from a genetic disorder. If you assume that your rates will be high and choose to lie on your application, you could end up being denied.
Best Practices When Applying for Life Insurance
Try to accrue as much family medical history as possible before applying for life insurance. The more details you have to provide on specific diseases, who had them in, and their ages at death or diagnosis will usually help your case. If you cannot fill in the blanks on important questions, underwriters may just assume a worst-case scenario and bump up your rates.
One exception to this is if you are adopted or do not know your birth parents. It is crucial to disclose this information on your application. Underwriters will only look at your health history in these cases and not make any presumptions about your family history.
With the popularity of ancestry services like 23andMe, it’s worth knowing that insurance companies can also look at these results. DNA testing kits can reveal underlying medical conditions and predispositions that insurers find particularly useful.
The best practice is to apply for life insurance BEFORE doing DNA testing. Insurers are starting to ask questions about these tests on their applications and may request your results. By applying first, you reduce the risk of insurers finding reasons to boost your rates and you retain your integrity. This saves you from potential trouble down the road.
Buying Life Insurance with Family Health Issues
There is no guarantee that you will lose coverage options. Or even see an increase in prices just because you have a history of illness somewhere in the family. The best approach is to conduct your own research beforehand, be completely honest, and shop extensively for plans.
At NextGen Life Insurance, we specialize in matching clients with life insurance policies that meet their needs, budgets, and life insurance goals. If you have questions about how your family history can affect you getting life insurance, our experts can guide you to the most valuable policies available. Get your free quote today or call us at 646-216-4199 to get started.