How Pre-Existing Conditions Affect Life Insurance

There are many misconceptions when it comes to how a pre-existing medical condition will affect a life insurance premium. Some people may hear advertisements for no-exam policies and assume that a pre-existing condition won't hinder their quest for quality life insurance. Others may not even attempt to get life insurance if they have a serious medical condition such as cancer or diabetes because they're afraid the policy won't be worth it. To clarify some of the confusion, let's take a look at the facts.

Controllable Issues

There are certain pre-existing conditions that will be more appealing to insurance providers than others. When it comes down to it, insurance providers are looking for how a person is making an effort to keep themselves healthy. So if an applicant has type 2 diabetes, an agent will want to see that the individual is working hard to adjust their diet and exercise routine as well as taking any medications they may need to control their blood sugar levels. If the person has a history of heart disease in their family as well as a current serious heart condition, they may have fewer options when it comes to negotiating their premium. But the good news is the number of controllable issues will only continue to climb as new research and medical techniques continue to improve life expectancy and patient outcomes.

Making the Rounds

Each life insurer will have its own take on pre-existing conditions, so shopping around and comparing reputations can make a difference when it comes to the service and benefits an individual receives. Typically, insurance companies will have the most resistance to major conditions such as metastasized cancer or chronic obstructive pulmonary disease. When it comes to other types of conditions, though, including high cholesterol, high blood pressure, or stroke, insurance companies will look at the severity of the condition, the factors that led up to the problem, and the actions a person has taken to control the issues. However, patients with severely compromised immune systems may still have trouble finding approval.¹

Guaranteed Acceptance

Guaranteed acceptance policies are sometimes the only choice for people with severe pre-existing conditions. They're generally available to people between the ages of 50 and 75 regardless of any pre-existing health conditions. The rates are typically much higher compared to an average life insurance policy, but there's also no chance of being denied. So long as a person continues to pay their premiums, their family or loved ones will receive a limited death benefit to cover the necessary expenses. Each life insurance policy will have its own terms, but the total amount of the death benefit is often the amount of the total premiums plus interest. There is no medical underwriting with this type of policy, so policies can be approved within minutes of applying.

It's fairly easy for patients to spot the patterns when it comes to how a pre-existing condition affects their benefits. Some may find that their potential rates are all relatively equal, while others may find their condition is far more malleable in the eyes of insurance companies. For example, they may find that four insurance companies deny full coverage due to type 2 diabetes while three others approve them for full benefits. There are no absolutes when it comes to exactly how much a person will pay for coverage over time. However, all potential applicants should be aware that they do have options for coverage—even if their only option comes in the form of a guaranteed acceptance.

1. PolicyGenius.com, June 22, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.