The most expensive medical conditions for life insurance buyers

Read the Spanish version:

Las condiciones médicas más caras para los solicitantes de un seguro de vida

 

If you’re shopping for a life insurance policy, you know that health problems will result in a higher premium. Any pre-existing medical condition that reduces your life expectancy will result in higher life insurance quotes.

The most “expensive” conditions are those that have the greatest impact on how long you’ll live. Here are five of the most expensive medical conditions that can impact life insurance costs and eligibility.

#1: Heart disease

The condition that will cost you the most is heart disease.

If you’ve had a heart attack or have been diagnosed with another form of heart disease, the damage to your heart may not be reversible. It takes more to keep your heart going when there’s existing damage, which can reduce your life expectancy.

#2: Diabetes

If you’re diabetic, the type of diabetes you have impacts rates – and even your ability to find a policy. If you have Type 1 diabetes that you developed as a youth, it may take some shopping around to even find a company willing to insure you. If you have adult-onset diabetes and take oral medication, or can control your diabetes through diet, you’ll be able to garner a lower life insurance rate than an insulin-dependent diabetic.

If you have Type 2 diabetes, it will pay to shop around. Life insurance companies apply “debits” and “credits” in determining your premium. A health problem will result in debits – meaning you’ll pay more. But some life insurance buyers can offset debits with credits. For example, an overweight person (debit) who is in good health (credit) can get a better rate that reflects their health.

However, each insurance company has its own way of applying debits for specific medical conditions. For instance, one company might apply 50 debits for diabetes, while another applies only 25 debits.

#3: Cancer

As with diabetes, the type of cancer you’ve had determines your premium. Insurers make a distinction between external and internal cancer. For example, a sun-related cancer, such as a lesion on the nose, may have little or no impact on life insurance rates.

But more serious types of cancer, like breast cancer, will cause most insurers to proceed with extreme caution. Some companies may not want to sell you a policy for one to 10 years after your cancer, in order to see whether treatment was effective. Even after that, you may be charged a “flat extra” – that’s an extra premium you pay for a specified period of time.

Flat extras are based on your age of diagnosis, your age now, and the stage of cancer. For example, a cancer survivor might be charged an annual flat extra of perhaps $25 for every $1,000 in coverage for a specified period.

Some cancer patients have an easier time getting approved for simplified issue life insurance.

“Simplified issue life insurance products don’t assess a risk class, but rather just an ‘approved’ or ‘declined’ status,” says Greta Cohen, co-founder and CMO at Pivotal Insurance. “The underwriter assesses the applicant’s risk based on the last instance of cancer along with their treatment protocol.”

#4: Obesity

Obesity is another major factor that impacts the cost of life insurance. And carrying extra weight isn’t the problem – it’s the medical complications that come with it: heart disease, hypertension, diabetes and so on.

It’s possible for obese people to get preferred rates if they’re healthy, and each insurance company will set its own standard for what is “healthy.” Bergstrom explains that if you have enough positive factors going for you (like good blood pressure and good cholesterol levels), the credits for those can offset the obesity enough to push you into a preferred rating.

“Most carriers have their own published ‘Build Chart’, which is a guide to weight restrictions based on the height of the individual. For instance, if an applicant is 5′ 10”, 180 lbs, and generally healthy, they may get approved for the carrier’s best rates given their low risk,” says Cohen.

“On the other hand, if the applicant is 5′ 10” and 350 lbs, with no major organ issues, the Build Chart would determine whether they will be accepted as applied or offered an alternate policy with a modified or graded waiting period. Each carriers’ Build Chart will vary with some being more liberal and others stricter,” Cohen adds.

#5: Pulmonary disease

Seasonal asthma won’t affect life insurance rates, but if you’ve battled asthma since you were a kid, expect a higher price.

“Chronic asthma is closely related to Chronic Obstructive Pulmonary Disorder (COPD) and Emphysema, which are broadly considered high risk conditions,” says Cohen.

These ailments, combined with being a smoker, will generally put you into a lower rating class, even with simplified issue life insurance that offers lower face amounts, adds Cohen.

Life insurance shopping tips

If you have pre-existing conditions, getting life insurance can be more difficult and more expensive. However, it’s still possible to get life insurance without being in perfect health. Here are some tips for getting life insurance with pre-existing conditions:

• Do your own quote research; look online for rates.
• Be honest on your application.
• Provide as much information as possible.
• Answer your own questions (don’t have a spouse fill out your application).
• Make sure to provide your doctor’s name, address and phone number on your application
• If you’re on medication, note the type, what it’s prescribed for, the dosage and how long you’ve been taking it.
• Don’t be afraid of the phone interview conducted by an insurer that’s reviewing your application; it’s routine for companies to go over your application answers again. The paramedical professional for your medical exam will ask the same questions again, too.

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