Even though life insurance is a valuable asset to have when estate planning, it can be challenging to obtain for those with pre-existing medical conditions.
Since life insurance is the only type of coverage that pays attention to your health and welfare, having any medical problems can prohibit you from getting the best policies.
That said, if you have pre-existing conditions, don’t fear. Life insurance is always possible, regardless of your specific situation. In some cases, you may be able to qualify for good benefits and affordable rates.
Here is everything you need to know about getting life insurance with pre-existing conditions.
What is a Pre-Existing Condition?
Some illnesses and conditions are temporary, meaning that they can be treated and cured. Others are chronic, meaning that they continue for long periods, potentially forever.
Any chronic medical condition you were diagnosed with before applying for life insurance fits under this definition. Some examples of pre-existing conditions can include:
While most of these ailments can be treated and don’t impact your life too much, they will still make a difference when applying for life insurance. This list is also not exhaustive, meaning that some insurance companies may include other conditions as well.
Another point to remember is that each insurer has its own rules regarding pre-existing conditions. So, while one company may deny coverage for a specific disease, another might offer limited policy options.
Overall, never assume that you can’t get life insurance. Regardless of your situation or medical condition, you should be able to provide financial security for your loved ones.
How Do Pre-Existing Conditions Affect Life Insurance?
Life insurance underwriters want to minimize risk as much as possible. Since your policy is based on your overall health and well-being, pre-existing health conditions can make you riskier to protect.
That said, because some issues are more severe than others, insurance companies will want to know as much information as possible. Here are the core components of pre-existing conditions that insurers will pay attention to when reviewing your quote request:
- Age – Since old age can cause various health problems on its own, pre-existing conditions might exacerbate these issues.
- Duration – More than anything, underwriters want stability. It’s the unknown that creates more risk. So, if you’ve had the condition for years and it’s under control, that offers more stability than a recent diagnosis.
- Medications and Treatment – If your condition requires medicine, that can be either good or bad, depending on the specific situation and whether there are side effects. As a rule, following a doctor’s orders makes you less of a risk.
- Hospitalization – If you’ve had to get hospitalized for a health problem, it will put you at a higher risk. Underwriters pay attention to why you were hospitalized, how many times you were administered, and what treatments you received. For example, getting multiple heart surgeries will disqualify you from most policies.
- Prognosis – Some conditions are mild, while others get worse over time. Depending on your prognosis, you may or may not be able to get standard life insurance rates.
When talking with an insurance agent, be sure to discuss these details in-depth. While it may be tempting to omit your condition, the insurance company will eventually find out about it. If and when that happens, your coverage will be denied, and you could get investigated for insurance fraud.
How to Mitigate Your Risk Level
Typically, having pre-existing medical conditions doesn’t affect your life too much. That said, you can minimize your risk level by following a few crucial tips, including:
Focus on Prevention, Not Treatment
Some chronic health conditions are curable if you make significant lifestyle changes. For example, heart disease and high blood pressure can be mitigated through weight loss and exercise.
While you shouldn’t avoid taking medication for these issues, focusing on a long-term solution can help reduce your risk level. Better yet, you’ll get healthier in the process, which comes with a host of other benefits.
Wait if Possible
As we mentioned, life insurance underwriters want to see signs of stability. If you were diagnosed within the last six months, you might be denied coverage. Even if you qualify, your rates will likely be significantly higher.
Instead, it’s better to wait to see how well you can manage the condition. Typically, one or two years is ideal and can help reduce your rates substantially.
That said, if you wait too long, you could push yourself into a higher rate bracket due to your age. In some cases, you may be able to get coverage now and then reduce your rates later once your condition is under control.
Follow Doctor’s Orders
Once you have a treatment plan, you must follow it as closely as possible. If you start avoiding medication or follow-up visits, underwriters will get nervous.
Best Life Insurance Options for Pre-Existing Conditions
One of the best ways to find the right coverage is to compare plans and rates from as many insurers as possible. Remember, one company may deny coverage for a particular condition while another doesn’t.
Here are the types of life insurance you should be able to qualify for, even with pre-existing conditions.
Term Life Insurance
Term life insurance provides a set death benefit if you die within a specified period. For example, you could buy a 20-year policy for $100,000. If you pass within those 20 years, your beneficiaries receive payment. If you outlive your policy, it expires, and no one gets anything.
Because term insurance plans don’t build cash value, they are easier to obtain. Compared to whole life insurance that comes with living benefits, most companies have looser restrictions for term policies.
Typically, insurers have a tiered system for term life insurance, such as:
- Preferred Plus – You are in excellent health.
- Preferred – You’re in good health with some minor setbacks.
- Standard Plus – You have a pre-existing condition with minimal impact on your health.
- Standard – You have moderately risky health conditions, such as diabetes.
While you won’t qualify for preferred plus rates, you can often get standard plus or possibly preferred status. Term insurance policies are frequently highly affordable, so you shouldn’t have any trouble paying standard plus or standard rates. As a rule, the longer your policy, the less you pay each month.
High-Risk Life Insurance
Some life insurance companies specialize in covering high-risk individuals. For example, Guardian Life has plans for those with HIV.
When comparing different policies, you can seek out insurers that cover your specific condition. Some companies may have separate options for conditions like diabetes, cancer, or high blood pressure. Since these insurers know what to expect, they can provide coverage.
In these cases, you will pay more for monthly premiums, but you can often get more flexibility in your policy, making it an ideal choice.
Guaranteed Acceptance Life Insurance
Most pre-existing conditions are manageable, meaning that you should be able to get term insurance. However, if your health status is more serious, then guaranteed acceptance policies might be your only option.
For example, if you have degenerative heart disease or terminal cancer, you won’t qualify for standard life insurance.
As the name suggests, guaranteed acceptance policies work for everyone. Regardless of your situation, you can get financial protection for your loved ones. However, these plans have significant limitations, including:
- Two-Year Waiting Period – If you die within two years of obtaining the policy, your beneficiaries only receive any premiums paid, plus 10 percent.
- Limited Death Benefits – Guaranteed acceptance plans often cap at $25,000 or $50,000, depending on the provider.
- High Premiums – You can expect to pay hundreds of dollars each month for one of these policies, compared to the low rates of term insurance.
Overall, we don’t recommend guaranteed acceptance life insurance unless you have no other options.
Group Life Insurance
While it makes sense to buy an individual life insurance policy, you may be able to get coverage through work. Many employers offer limited life insurance plans for workers, also called group insurance.
This option is ideal if you can’t afford an individual policy due to pre-existing conditions. Since you’re paying for coverage with other people, your rates are much lower.
That said, there are two significant downsides to group insurance. First, your death benefits may be relatively low – around twice or three times your annual salary. Second, if you lose your job or move to another company, you lose your coverage.
Contact NextGen Life Insurance Today
Getting life insurance with pre-existing conditions is possible, especially when you compare options between many different providers. At NextGen Life Insurance, we make it easy to find the right policy for your needs and budget. Get your free quote today or call us at 646-216-4199 to get started.