In today’s economy, purchasing life insurance is quick and easy, and because of competition among insurance companies, rates are lower than ever.
If you are a healthy non-smoker, you can typically purchase a $1 million policy with a monthly premium that is less than two large pizzas.
But, if you want life insurance with pre-existing conditions, you’ll likely experience some challenges while trying to get those super-low rates.
Here, we’ll discuss buying life insurance with pre-existing conditions and how to overcome challenges brought on by current medical conditions and medical issues in the past.
What is a Pre-Existing Condition?
Simply put, a pre-existing condition is a medical condition that you have now or had in the past.
Although some are more severe than others, all of them may impact how much you’ll pay for a life insurance policy.
According to the CDC’s 2017 Report, the top 5 medical conditions in the US are:
|Medical Condition||Deaths Per Year||% of Total Deaths|
|Heart Disease||635,230||23.1 percent|
|Lower Respiratory Disease||154,596||5.6 percent|
|Alzheimer’s Disease||116,103||4.23 percent|
How do Pre-Existing Medical Conditions Affect Life Insurance Costs?
When an individual applies for life insurance, the underwriters will collect medical information about you and your family.
Historical health of immediate family members
Depending on the life insurance company, this information can be discovered by your answers to medical questions on the application, a medical exam, MIB report, and prescription drug report.
Not every medical condition will affect your ability to buy life insurance, but most health conditions will affect how much you pay for life insurance.
When you apply for life insurance, your rates are based on a scale from Preferred Plus (lowest rates) to Substandard (highest rates).
Every life insurance company uses “underwriting guidelines” that can move your rate class from Preferred Plus down to Substandard when the medical data is reviewed during the underwriting process.
Because insurance companies use proprietary underwriting guidelines, some companies may increase your rates for XYZ medical conditions while other companies will not.
This is all the more reason why insurance shoppers (especially those with pre-existing conditions) should use an independent insurance agent who represents multiple companies.
Independent agents generally know in advance each carrier’s “sweet spot” when it comes to the most common medical conditions and can rate you with all of the companies they represent simultaneously.
What Medical Conditions Impact Life Insurance Rates?
Although every medical condition can impact which health classification an applicant will qualify for, most carriers will consider how the condition is being managed as well as its severity.
For example, having high cholesterol can be very dangerous if left untreated. Still, an insurance underwriter will typically not blow up your rate if you present evidence that you’re managing your high cholesterol properly, and test results indicate your score is regularly coming down.
On the other hand, if you were to apply for life insurance with high cholesterol and do not demonstrate that you are taking it seriously, most underwriters will penalize you with a higher rate class, which translates into higher rates for your policy.
Rather than publish a list of medical conditions that will negatively impact life insurance rates, most companies consider each condition and how you are responding to treatment. Generally, the underwriter will require information about the following:
- Severity of the medical condition – The severity and life expectancy of the medical condition will be considered, along with whether there are treatments available that will positively affect your life expectancy.
- Current or Historical – If the applicant’s medical condition is current, the insurance underwriter will likely require a supplemental questionnaire for that specific condition. If the condition predates the application by several years or more and recovery was achieved, the underwriter will be less concerned about it.
Time since the first diagnosis – In most cases, the longer an illness lingers, the greater the chance for complications, which can result in higher life insurance rates.
Lifestyle – Although drinking alcohol and smoking is not considered a medical condition, having a history of bad choices could affect insurance rates just like a medical condition.
What’s the Best Type of Life Insurance for People with Pre-Existing Conditions?
As we mentioned earlier, most insurance companies have “sweet spots” for some medical conditions. The type of policy you purchase can also help mitigate the risk you present to an insurer when you have pre-existing medical conditions.
Term Life Insurance
Since term life insurance generally has the most affordable rates, and you can purchase coverage for 10 to 30 years, you’ll be able to lock in very low rates as long as certain medical conditions are being treated and appear to be under control.
Additionally, many insurance companies offer no exam term life insurance in coverage amounts of $50,000 to $1 million. These no exam policies are underwritten electronically and are generally issued within a week rather than months.
Permanent Life Insurance
Although permanent life insurance like whole life or universal life costs much more than term insurance, once an applicant qualifies for coverage, he or she is guaranteed coverage that cannot be canceled except for non-payment and periodic premiums that cannot be increased by the insurance company.
Additionally, permanent life insurance builds cash value over time, which can be accessed by the policyholder via policy loans, withdrawals and can be surrendered for cash.
Final Expense Insurance
Final expense insurance policies are marketed to adults between the age of 50 and 85. As such, insurance companies expect applicants to present with one or more medical conditions, so companies generally have liberal underwriting guidelines to accommodate senior applicants’ needs.
Since a final expense policy is generally whole life insurance, these policies contain the same guarantees and benefits that traditional whole life policies offer – guaranteed lifetime coverage, guaranteed level premiums, and cash value that earns tax-deferred interest.
Guaranteed Issue Insurance
Guaranteed Issue (guaranteed acceptance) life insurance policies were designed for applicants who have severe or multiple health conditions. When you apply for guaranteed issue life insurance, the insurance company does not take your health conditions into consideration.
In exchange for agreeing to accept an unknown health risk, guaranteed issue insurance policies contain a two-year waiting period when they will pay a modified death benefit, which is typically 110% of all premiums paid to the company at the time of death of the insured.
However, the policy will pay the full death benefit if the death resulted from accidental causes.
Group Life Insurance
When you are offered group life insurance from an employer, union, or other approved association, the policy will typically be guaranteed issue insurance and health conditions will not affect the policy’s premium.
However, some group insurance companies will consider medical conditions if you add your spouse or children to the policy. It’s also important to note that group life insurance coverage is generally based on a multiple of the applicant’s annual income.
Life Insurance Riders for People with Pre-Existing Conditions
Most insurance companies will offer various riders that can be added to your insurance policy that can broaden your benefits and provide additional living benefits.
Although available riders vary by the insurance company, these are the most popular:
Accelerated Death Benefit – The accelerated death benefit provides for the insurance company to advance a large portion of the death benefit to the insured in the event the insured is diagnosed with a covered illness. Most companies will offer this advance if the insured is diagnosed with a terminal, chronic, or critical illness. When the insured passes, the amount of the advance is subtracted from the death benefit that will be paid to the designated beneficiary.
Long-Term Care Rider – The long-term care rider will pay a monthly benefit if the insured has to spend an extended amount of time in a nursing home or long-term care facility. Like the accelerated death benefit, the benefits paid are considered am advance on the death benefit.
Waiver of Premium – The waiver of premium rider helps keep a policyholder’s coverage in force if they become disabled and cannot afford their life insurance premium. Through this rider, the insurance company will waive all premiums while the insured person is unable to work.
Flat Extras for Pre-Existing Conditions
Most insurance companies that agree to accept certain pre-existing conditions or hazardous hobbies and occupations will use a premium surcharge called a Flat Extra.
A flat extra is generally an additional premium (e.g. $5 per $1,000 of the death benefit) that allows the insurance company to mitigate some of the risk for accepting a high-risk applicant.
Depending on the risk that is justifying the flat extra, the insurance company can charge it temporarily or permanently.
The good news is that many insurers will remove the flat extra if the insured reduces their risk to the company by recovering from a medical condition or no longer takes part in hazardous hobbies like skydiving or mountain climbing.
How Do You Get a Life Insurance Policy When You Have a Pre-Existing Condition?
Although certain pre-existing conditions will likely cause an application to be declined, many applicants can purchase affordable life insurance when pre-existing conditions are present at the time of application.
The best strategy for purchasing life insurance when you have pre-existing conditions is to contact an independent insurance broker who specializes in hard to place cases.
Surprisingly, there are many agents out there who prefer clean cookie-cutter life insurance prospects because they are more concerned about earning commissions than helping a prospective client with health issues.
LifeInsure.com (Intramark Insurance) is one such brokerage that represents many of the highly-rated life insurance companies and uses innovative technology to deliver multiple quotes from multiple insurance companies.
The experienced and reputable insurance professionals at LifeInsure will always become our clients’ advocates during the life insurance shopping, underwriting, and purchasing process, whether the client is very healthy or if there are pre-existing illnesses to contend with.
Our agents are committed to finding insurance companies that have “sweet spots” for various health conditions that many companies frown on. We have the experience needed to present every case in the best light and are available to help every client navigate the underwriting process.
Moreover, it’s important to note that independent agents are not employees of the carriers they represent and, as such, have the ability to put the client’s needs first and foremost.
What Can You do if You’re Denied Life Insurance Because of a Medical Condition?
Regretfully there are individuals with severe medical conditions or hazardous lifestyles that can result in their applications being declined.
Typically this happens if the pre-existing condition is untreatable or life-threatening or if there is a history of alcohol or drug abuse with no demonstrable evidence of rehabilitation.
Knowing that life insurance underwriting guidelines vary by company, your best option is to use an independent broker who has access to many insurance companies and has a history of getting difficult cases issued.
There is, however, an insurance option when all else fails. Although many TV insurance companies offer Guaranteed Issue policies to insurance shoppers who might qualify for a traditional policy with affordable rates, we only offer guaranteed issue insurance coverage as a last result.
The bottom line is, even though guaranteed issue policies cost more and have a waiting period for death due to natural causes, virtually any person who is alive can purchase coverage.
Lastly, in some cases, an insurance company may accept your case after declining it if a required amount of time has passed since having treatment for the condition.
For example, many companies will decline an applicant with Hepatitis C but then offer coverage after the applicant has been treated and cured a year later.
Which Life Insurance Companies Provide the Best Policies for People With Pre-Existing Conditions?
Since life insurance underwriting guidelines vary by insurance company, it is difficult to provide a list of companies that offer the best policies when pre-existing conditions are present.
Knowing this, it’s essential that individuals with pre-existing conditions shop as many insurance companies as possible. Fortunately, highly-skilled independent insurance brokers represent most of the highest-rated insurance companies and are familiar with the medical conditions each is willing to tolerate.
When an insurance shopper has pre-existing health conditions, it’s doubtful that he or she will be able to purchase traditional life insurance from a TV or company agent, so it makes good financial sense to go through an independent agent that has experience placing high-risk cases.
Finally, make certain that any coverage being offered is from a highly-rated company that has demonstrated long-term financial stability and offers outstanding claims service.
Get a Quote Today
If you are shopping for life insurance with pre-existing conditions, we invite you to call our office during normal business hours at 866-868-0099 or feel free to send us a message through our website 24/7.
In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs. Being independent, I represent many highly-rated insurance companies and, because I am not beholden to any one insurance company, my focus is to find the right company and policy for each individual client. I believe that when people shop for insurance (or anything else, for that matter) on the Internet, they are looking for a simple, non-intrusive, non-pressure method of doing so. I strive to treat my prospective clients with the utmost respect and I believe an educated prospect can make the right decision without sales pressure. Please feel free to contact me at your convenience.