Diabetes is a serious, lifelong condition that affects 10.5% of Americans. Despite its prevalence, those with diabetes often believe that it can be difficult, if not impossible, to access life insurance that fits their needs. While this perception is largely a myth, people with diabetes still need to take a few extra steps to qualify.
This article will explore what you can do to better afford life insurance, what to look for in a policy, and where to find one.
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Can You Get Life Insurance as a Diabetic?
Yes, a person with diabetes can qualify for life insurance. Regardless of which variety of diabetes you have and how severe the condition is, there will be available policy options. However, accessing less expensive life insurance depends on your ability to stay healthy. To be eligible, the insurer will look for you to pursue a lifestyle that includes diet and exercise.
Traditionally, people with diabetes have found it challenging to access life insurance policies. Qualification and the price of premiums are primarily dictated by the insurer’s perception of the level of risk an individual poses. Because life insurance provides coverage when a person passes away, insurers correlate risk, and therefore costs, with one’s likelihood of dying. Because diabetes can severely impact your health, providing coverage to those individuals is seen as “higher risk.”
However, thanks to advances in the study and treatment of diabetes, it is possible to live a long and healthy life if you thoughtfully and effectively manage the disease. As a result, people with diabetes are finding it easier than ever to access affordable life insurance that matches their needs and the needs of their families.
Which Type of Life Insurance Is Best for Diabetics?
There are no types of life insurance designed specifically for people with diabetes. However, some life insurance types have features that those with diabetes may want to consider as they compare their options.
No Medical Exam vs. Full Underwriting Policies
While many insurers require medical underwriting as part of the application process, there is sometimes the option to forego the examination process. Deciding to forego underwriting or partake in it each provide some advantages and disadvantages:
Advantages of Skipping Medical Exams
- You will pay the same rates regardless of your health
- Coverage can be attained quicker
- May allow you to be eligible for more policy types
Disadvantages of Skipping Medical Exams
- You will pay significantly higher premiums
- Less flexibility in death benefits
- There is no guarantee of acceptance, depending on the policy type
Advantages of Full Underwriting
- More coverage options are available
- Lower premiums
- Higher death benefits
Disadvantages of Full Underwriting
- Takes longer for application to be reviewed
- Higher probability of being rejected, depending on the policy type
However, it should be noted that most no-exam health insurance policies still require applicants to complete at least a health questionnaire.
Term Life Insurance Policies
Term life policies provide coverage for a set period, usually 10-30 years. The premium for a term policy is also locked in, so it will not increase over the policy’s coverage period. However, if you outlive the term period and do not renew your policy, you will be uninsured and will have to reapply for coverage, necessitating another round of medical underwriting.
Because term policies are less expensive than permanent life insurance and last for a finite amount of time, medical underwriting is traditionally required. This may be a good option for a diabetic who is effectively treating their condition, knows they will continue to do so, and wants to save money on premiums.
Permanent Life Insurance Policies
In contrast, permanent life policies do not expire as long as you continue to pay premiums. You apply once, make monthly premium payments, and do not have to reapply unless you look for a policy elsewhere. Some permanent life policies offer an accelerated death benefit, a rider that allows the policyholder to withdraw money from the ultimate value of their plan to plan to pay for medical or other expenses if they are terminally ill and expected to pass within two years.
Permanent life policies are often more expensive than term. However, they offer advantages that could appeal to those with diabetes. For example, permanent life policies are more likely to offer the option of minimal underwriting, or in some cases, no underwriting altogether, such as in guaranteed issue policies. Therefore, it may be easier to get approved for a permanent life policy than others. Also, because your policy is permanent, you will not have to reapply as you age.
Graded Permanent Life Policies
Even if insurers do not accept the application for a standard permanent life policy, the applicant may be approved for a graded permanent life policy instead. A graded policy functions the same as a standard policy, only it features a waiting period, usually of about two to three years. Policyholders who die within that waiting period will only have a portion of their death benefit paid out. However, policyholders who outlive the waiting period will have a standard permanent life insurance plan in place.
Simplified Issue Life Insurance With Diabetes
In contrast to most permanent life policies, simplified issue life insurance doesn’t require a complete medical exam to be eligible. Instead, those that apply answer a questionnaire as part of the application process. Keep in mind that, while you will not have to go through full medical underwriting, insurers offering these policies can still deny you based on the information provided in the questionnaire.
Simplified life insurance is a good idea for individuals with diabetes who do not want to take a medical exam but still want access to higher death benefits than those offered by other policies that skip underwriting, such as guaranteed life insurance. While simplified issue life insurance offers death benefits up to $100,000, guaranteed issue policy offers only up to $25,000.
Guaranteed Issue Life Insurance With Diabetes
A guaranteed issue life policy is a type of permanent life policy that doesn’t require any health questionnaire or a medical exam. Eligibility criteria are minimal, with most insurers only requiring applicants to be between 50 to 80 years old. However, guaranteed life offers significantly lower death benefits than other varieties, with the maximum benefit being $25,000.
A guaranteed issue life policy is similar to a graded permanent life policy in that there is a waiting period that policyholders must outlive before their beneficiaries are eligible for the full death benefit. This period typically lasts between two to three years. If a policyholder passes during the waiting period, their beneficiaries would receive all premiums paid with interest instead of the death benefit payout.
Guaranteed life insurance may be the only option for individuals with severe forms of diabetes who cannot access coverage elsewhere. It should be noted that because this type of life insurance policy accepts high-risk individuals, premiums tend to be higher.
Final Expense Life Insurance Policies
Final expenses life insurance is also known as burial coverage. Policyholders can use this type of coverage to pay funeral costs or outstanding loans once the subject reaches the end of their life. Because the death benefit is lower than other policies, it does not provide much, or any, additional financial assistance to your family after you pass.
Final expenses life insurance coverage can be more expensive than traditional permanent life or term life policies because it is often utilized by those deemed higher risk by insurers. However, it may be a good option for those with diabetes looking to settle their remaining debts and help their beneficiaries pay for burial costs.
What Factors Affect Diabetics Looking for Life Insurance?
In general, insurance companies consider a diabetic applicant’s lifestyle, age, health, and how much coverage they want as part of their policy. These factors are considered during medical underwriting or through a health questionnaire, a process in which a physician will thoroughly analyze one’s health to discern the level of risk they pose to the insurer.
Medical Underwriting Results
Those with pre-existing conditions, like diabetes, will likely be evaluated during this process. In addition to standard medical diagnostics, expect to provide information on medications, your blood sugar levels, and how long and effectively you’ve been managing your condition.
The underwriting process will also factor in which type of diabetes you have. Diabetes can have different onset factors, treatments, and outcomes. Considering which one you manage may render different results in terms of price and availability.
Management of Type 1 and Type 2 Diabetes
Diabetes can be divided into two types: Type 1 and Type 2. Both types of diabetes have the potential to become dangerous, but Type 2 is generally more manageable. Those with Type 2 diabetes can expect to have an easier time getting life insurance coverage and may pay lower premiums than those with Type 1.
Type 1 Diabetes
Type 1 Diabetes, otherwise known as “insulin-resistant” diabetes, is passed on from hereditary sources and more challenging to treat. It requires the use of daily insulin shots. In general, the earlier one is diagnosed with Type 1, the longer the disease can damage the body, resulting in a higher risk of premature death if untreated. However, this does not mean that Type 1 Diabetes is untreatable. Many individuals with Type 1 go on to live long, healthy lives.
Type 2 Diabetes
Type 2 diabetes is often caused by lifestyle, and so emerges later in life. It also does not necessarily require the use of insulin for treatment. Because the onset of Type 2 occurs later in life, it has less time to damage the body. In many cases, those with Type 2 can manage, and sometimes reverse, their condition with diet and exercise.
Other Health Concerns that Affect Life Insurance Coverage for Diabetics
Diabetes doesn’t just affect a person’s blood sugar. Untreated diabetes can cause several health problems that could affect one’s ability to get affordable life insurance. Among them are:
- Heart disease and heart attacks
- Nerve damage
- Kidney damage
- Eye damage
- Foot damage
- Hearing damage
- Skin and mouth conditions
Considering the number of health risks diabetes poses, the possibility of premature death in this population is higher than average, therefore making it harder to access affordable premiums or coverage at all. Remember that these outcomes are not guaranteed, and many people with diabetes can avert them if they effectively treat their condition.
How the Type of Diabetes Can Impact the Cost of Life Insurance
While it is fair to generalize that those with Type 2 may find it easier to access coverage and pay lower premiums than those with Type 1, this is not always true. Insurers base rates more on the health of the individual. For those with diabetes, this is heavily dictated by your blood sugar levels.
Though this is at the insurer’s discretion, those with Type 1 will be eligible for lower rates if they are taking fewer than 50 daily units of insulin and their blood sugar levels are below 8. In contrast, you can realize similar results with Type 2 if you effectively manage your condition and your blood sugar is below 7.5 at the time of underwriting.
What If Your Health Improves After Being Diagnosed With Diabetes?
Imagine a situation where a 30-year-old person purchases a life insurance policy right after being diagnosed with Type 2 diabetes. At the time of underwriting, their blood sugar was 8.5. Therefore, they are quoted a policy that costs $150 per month.
Following the examination, in careful coordination with their doctor, they develop a diet and exercise plan and send their diabetes into remission, with their blood sugar falling below 6. Will that lower their rates?
Unfortunately for that individual, their rates will not be affected by managing their condition. Life insurance rates become locked in after underwriting and cannot be adjusted retroactively. Luckily, that individual does not have to keep their expensive policy. Instead, their remission should provide extra incentive to find a new, more affordable policy.
For this reason, it is also important to time when you undergo medical underwriting. If you are committed to making lifestyle changes to reverse your Type 2 diabetes diagnosis, it may be a better idea to wait until that happens before applying for life insurance.
What Happens to an Existing Policy If You Are Diagnosed With Diabetes?
Once a policyholder locks in a policy, the insurance company won’t change the premium or the conditions. The only possible complications that could pop up if a person’s health circumstances change are:
If the person has a term life policy and wants to renew it for another term, their rates could increase. If the policy has a conversion option, they should consider converting to a permanent life policy instead. Converting to a permanent life policy will be more expensive than their current term policy, but the policyholder won’t have to requalify for coverage, and the policy will last as long as they need.
If the policyholder has a term policy through their employer (also known as group life) and leaves their job, they may have to reapply and undergo a medical exam. Some group life policies have options to convert the policy to an individual life policy, but they can be more expensive than a standard policy for a person with diabetes. In this case, the person should shop around for another coverage policy.
If the policyholder wants to increase their death benefit, the insurance company will require additional underwriting procedures. If the company discovered their insured has diabetes, or their conditions worsened during this process, their premium would increase.
For universal or whole-life policies, the policyholder could purchase paid-up supplements that will increase their death benefit without taking a medical exam. Because term policies require an exam before increasing their death benefit, policyholders should consider a second policy that doesn’t require a medical exam.
What If You’re Turned Down?
If insurance companies reject a person with diabetes, they can purchase a guaranteed-issue life insurance policy, and that is typically the only remaining option. A guaranteed life policy will give the applicant coverage, but the premium tends to be on the higher end of the spectrum.
What This Means For You
If you are in the process of managing your diabetes and have a positive outlook from your doctor, you may want to consider waiting for some time before purchasing. While insurance usually gets more expensive with age, it could ultimately be cheaper to wait until your numbers subside before applying. That decision will depend on your personal circumstances, so make sure to monitor your health and continue shopping around for rates as your situation changes.