Applying for life insurance with a pre-existing condition can seem intimidating. Still, fortunately, life insurance companies understand that not everyone that applies for coverage is going to be in perfect health. In this article, we’ll discuss what pre-existing conditions are, how they impact life insurance, how to obtain coverage with pre-existing conditions, and what to do if a potential insurer denies your application.
Table of Contents
What Are Pre-existing Conditions?
Pre-existing conditions are health conditions that an applicant has before their insurance policy takes effect. Each insurance company has methods for determining who qualifies for their coverage. Many insurers factor in the applicant’s lifestyle and health condition.
Pre-existing conditions may include diabetes, high blood pressure, asthma, epilepsy, high cholesterol, HIV/AIDS, heart disease, depression, and cancer. Some companies may even consider certain types of injuries as pre-existing conditions depending on the seriousness of the injury. Insurers tend to count lingering issues that the applicant has after the incident.
How Do Pre-existing Conditions Impact Life Insurance?
Insurers will typically categorize applicants into several groups when deciding who qualifies for coverage. While it’s true that they don’t expect everyone that applies to be in top shape, they group people of similar health and lifestyle backgrounds to offset the payout risk with bigger groups.
In general, the less healthy the group is, the higher the premium payments for that group will be. If an insurer decides that the risk for a particular applicant is too high, they’ll deny that person coverage through their company.
Ways To Improve Insurability if You Have Pre-existing Conditions
There are ways for applicants with pre-existing conditions to lower the expiration risk, allowing life insurance companies to insure them. They include:
An applicant that tries to sign up for coverage right after a terminal diagnosis or a life-threatening ailment may have a higher chance of being rejected for the diagnosis. But suppose the applicant can prove to the insurance company that they’re monitoring their health by changing their diet and lifestyle habits. In that case, the insurance company will feel more comfortable knowing that the applicant is doing what they can to take care of themselves.
Follow Prescribed treatments
An insurance company will be much more willing to insure an applicant with a pre-existing condition if they can see that the applicant is willing to follow their doctor’s orders. For example, taking a prescription at the appropriate time and dose.
Another example could be sticking to a recommended diet and incorporating the appropriate activity levels to maintain as healthy a lifestyle as possible.
What To Expect When Purchasing Life Insurance With Pre-existing Conditions
The process from gathering quotes to signing a contract for a life policy is typically the same. The steps will look something like this:
Gather Quotes and Collect Documents
Online applications and forms are a quick way to see if an applicant qualifies for life insurance through a particular company. An applicant should reach out directly to a broker or adjuster to get an accurate quote for a pre-existing condition.
The applicant should also be prepared to answer questions and provide documentation of employment, citizenship, and proof of residency.
Complete the Application
After the applicant fills out the quote form, they complete the application form. This form provides more in-depth information about any diagnoses or medications. They also provide information about their lifestyle, eating habits, and hobbies. The applicant should submit any required medical records and answer any follow-up questions should they arise.
Once the applicant finishes their paperwork, they will set an appointment for a medical exam and interview. The nurse collects blood and urine samples and takes the applicant’s height and weight. Depending on the pre-existing condition, the applicant may require further testing that the nurse will administer during the exam.
Starting the Policy
The insurance company evaluates the information the nurse and application processes collected. Insurers use it to decide if insuring the applicant is a risk they’re willing to take. If the insurance company accepts the applicant, the company sends the applicant a contract that the applicant must review, sign, and send back to the company to initiate the policy.
The document includes coverage amounts, exclusions, premiums, payment methods, and other plan-specific information. The applicant should keep a copy of the contract to reference if they have any questions.
Best Life Insurance Options With Pre-existing Conditions
With tailored life insurance options, a company offers coverage to a specific group of insureds with the same pre-existing conditions, covering everything from cancer to HIV. Group life insurance from an employer offers a policy designed to cover several employees at a time.
An employer doesn’t consider pre-existing conditions when granting coverage with this coverage. Guaranteed life insurance is coverage without any medical exam or health survey. Therefore, patients with severe medical conditions favor it.
Accidental death and dismemberment insurance trigger only if the person expires due to an accident, which has no bearing on the prior health of the insured.
What To Do After Being Denied Life Insurance
If an applicant is denied life insurance through a traditional insurance company, they can still check with their employer and sign up for their group life insurance program. The applicant’s pre-existing conditions probably won’t be considered when joining their employer’s life protection program. But depending on the program, the death benefit may be limited, and the policy will only apply while the applicant works for the company.
A guaranteed issue life insurance policy is a type of insurance that will accept applicants without subjecting them to a physical screening or completing any health surveys. Guaranteed life is the only option for cancer patients and other patients with life-threatening illnesses.
This type of policy is often much more expensive than a traditional life policy because the applicant faces no screening. The policy will include a clause that states that if the person expires within so many months of the start of the policy, the insurance company will send the family the premium back as opposed to paying out the death benefit.