Life Insurance With Copd: Is It Possible?

If you have Chronic Obstructive Pulmonary Disease (COPD), you can still get life insurance, especially if your condition is well-managed. However, your diagnosis may affect the terms of your policy and the premiums you will pay. The type of life insurance policy you qualify for, and how much it will cost, is dependent on factors such as the severity of your COPD, your overall health, and your treatment plan.

What factors affect the cost of life insurance with COPD?

If you have chronic obstructive pulmonary disease (COPD), you can still get life insurance, especially if your condition is well-managed. However, your diagnosis may affect the terms of your policy and the premiums you will pay.

Severity of COPD

The severity of your COPD symptoms is a crucial factor in determining the cost of life insurance. Mild COPD with minimal symptoms may qualify for standard approval at regular rates, whereas more severe cases may require a surcharge or table rating, increasing the premium cost.

Medications and Treatment

The types of medication and treatment prescribed for your COPD are also taken into account. If you require prescription medications, such as bronchodilators or steroids, it indicates that your condition is more severe and may result in higher premiums.

Prognosis and Life Expectancy

The prognosis and life expectancy associated with COPD can impact the cost of life insurance. The BODE Index, which considers factors such as obstruction of the airway, is often used to predict life expectancy after a COPD diagnosis. A lower BODE Index score indicates a more favourable prognosis and may result in lower premiums.

Tobacco Use

Smoking or tobacco use will affect life insurance rates. Current smokers will typically pay more for traditional life insurance policies. Quitting smoking can help improve your health and may result in lower premiums over time.

Overall Health

Underwriters will also consider your overall health when assessing the cost of life insurance with COPD. COPD is often accompanied by other medical conditions, such as cancer or heart disease, which can impact your life expectancy and risk assessment.

Age, Gender, and Family History

Age is a significant factor, as younger individuals are generally considered lower-risk and may qualify for lower premiums. Gender also plays a role, with females typically having a longer life expectancy and, therefore, potentially lower premiums. Family history of hereditary diseases can also impact the cost of life insurance.

Lifestyle and Occupation

High-risk jobs or hobbies can lead to higher insurance costs. Lifestyle choices, such as diet and exercise habits, can also impact your overall health assessment and may be considered when determining the cost of life insurance with COPD.

What are the different types of life insurance available to people with COPD?

People with Chronic Obstructive Pulmonary Disease (COPD) can still get life insurance, but the specific policies available to them will depend on the severity of their condition, their treatment plan, and their overall health. Here are some of the different types of life insurance available to people with COPD:

Term Life Insurance

Term life insurance is a good option for most people, as it is affordable and provides coverage for a set term, usually between 10 and 30 years. This type of policy may be suitable for people with well-managed COPD whose loved ones would only need financial support if they passed away before retirement age. However, term life insurance is not available without a medical exam, and people with severe COPD may struggle to qualify for this type of policy.

Whole Life Insurance

Whole life insurance lasts until the policyholder passes away and includes a cash value feature that allows for loans. This type of policy is a good option for people who want to provide a death benefit to their beneficiaries regardless of when they die. While whole life insurance is typically much more expensive than term life insurance, it may be a suitable option for people with well-managed COPD.

Final Expense Insurance

Final expense insurance, also known as burial insurance, is a type of whole life insurance designed to cover end-of-life expenses such as funeral costs. This type of policy is easier to qualify for than traditional policies and is often used by people with serious health conditions. Final expense insurance typically has lower coverage limits, ranging from $25,000 to $40,000.

Guaranteed Issue Life Insurance

Guaranteed issue life insurance is a type of policy that does not require a medical exam or health questions, making it a good option for people with severe COPD who have been declined for other types of coverage. However, guaranteed issue policies are more expensive and provide lower death benefits. They also come with a waiting period, typically two years, during which the full benefit will not be paid out.

Simplified Issue Life Insurance

Simplified issue life insurance is another option for people with COPD who cannot qualify for traditional policies. While it does not require a medical exam, it does involve a brief health questionnaire. Simplified issue policies are less expensive than guaranteed issue policies but more expensive than traditional coverage.

What are the pros and cons of guaranteed issue life insurance?

Guaranteed issue life insurance is a type of policy that doesn't require a medical examination or extensive health questionnaire, making it ideal for individuals with pre-existing conditions, older adults, or those with severe health issues. Here are some pros and cons to help you understand if this type of insurance is right for you:

Pros:

• Easy Application Process: There are no medical exams or lengthy health questionnaires, making the application process simpler and quicker.
• No Denials Based on Health: As there are no medical questions or exams, you won't be denied coverage due to health issues. This is especially beneficial for those turned down by traditional policies.
• Coverage for Pre-existing Conditions: Guaranteed issue life insurance offers coverage for individuals with pre-existing medical conditions who may not qualify for other types of insurance.
• Coverage for Older Adults: It becomes challenging to secure affordable life insurance as you age, and guaranteed issue life insurance provides an option for seniors who may not qualify for other types of coverage.
• Peace of Mind: Guaranteed issue life insurance offers peace of mind, knowing your loved ones will have financial support in the event of your passing.

Cons:

• Higher Costs: Insurers take on more risk by not requiring medical exams or health questionnaires, resulting in higher premiums for guaranteed issue life insurance compared to traditional policies.
• Lower Coverage Amounts: These policies typically offer lower coverage amounts, often ranging from a few thousand dollars to $25,000 or $50,000. This may not be sufficient for those seeking substantial financial security for their families.
• Waiting Period: Many guaranteed issue life insurance policies have a waiting period, usually 2-3 years, during which the full death benefit is not available. If the insured passes away during this period, beneficiaries may only receive a portion of the benefit or a refund of premiums paid.
• Limited Additional Features: These policies are generally more straightforward and offer fewer optional riders or features compared to traditional life insurance.
• Not Ideal for Healthy Individuals: If you're in good health and willing to undergo a medical exam, you may qualify for traditional life insurance at a lower cost. Guaranteed issue life insurance is often unnecessary and more expensive for healthy individuals.
• Potential Overpayment: Since there is no medical underwriting, even healthy individuals pay the same premiums as those with health issues, which could result in overpayment for the coverage provided.
• Not Ideal for Long-term Planning: The lower coverage amounts and higher premiums make guaranteed issue life insurance less suitable for long-term financial planning. It is often more appropriate for covering final expenses rather than income replacement or significant debts.

How does COPD severity affect insurance rates?

The severity of your COPD will affect your insurance rates in several ways. Firstly, it will determine the type of life insurance policy you can qualify for. If your COPD is mild (Stage 1) with minimal symptoms, you are more likely to be approved for standard insurance policies at regular rates. However, as the severity of your COPD increases, you may have to opt for guaranteed issue policies, which do not factor in your health but are significantly more expensive and provide a lower death benefit.

The underwriting process for life insurance involves assessing your risk level as an insured individual. During this process, underwriters will ask questions about your COPD diagnosis, including the specific type of COPD, your symptoms, medications, prognosis, tobacco use, and overall health. These factors will help them understand the potential risk you pose and set the premiums accordingly.

The severity of your COPD symptoms plays a crucial role in determining the type of policy you qualify for. Mild symptoms may allow you to obtain standard approval, while more severe symptoms may lead to higher premiums or even denial of coverage. Additionally, the types of medication you take can be viewed as red flags by insurance carriers, indicating that your condition is more severe and requiring higher premiums.

Overall, the impact of COPD severity on insurance rates is significant. Mild or well-managed COPD may result in standard insurance policies with affordable rates, while severe or poorly managed COPD may require more expensive guaranteed issue policies with lower benefits. The underwriting process considers various factors related to your COPD diagnosis to assess your risk level and set the corresponding insurance rates.

What are the best life insurance companies for people with COPD?

If you have chronic obstructive pulmonary disease (COPD), you can still get life insurance, especially if your condition is well-managed. However, your diagnosis may affect the terms of your policy and the premiums you will pay.

Corebridge Financial

Corebridge Financial (formerly AIG Life & Retirement) can offer up to Standard rates for people with only mild changes in lung function due to their COPD. To qualify for Standard rates, oxygen treatment must not be part of your treatment plan. If you are experiencing moderate symptoms and taking medication such as albuterol or Pulmicort (budesonide) daily, you may only qualify for some of the most expensive rates.

Mutual of Omaha

Mutual of Omaha is a good choice if you are a current smoker with a lung condition or if you require supplemental oxygen. They offer a guaranteed issue life insurance option, which is a type of whole life insurance that offers near-certain approval and doesn't require a medical exam or medical questionnaire. It offers up to $25,000 in coverage, even if you are managing a higher-risk lung condition, but it is only available to people aged 45 and older.

Legal & General America

Legal & General America, which also does business as Banner Life and William Penn, has some of the longest term lengths—up to 40 years—and most competitive life insurance rates available, even for people with a history of medical conditions. They can offer up to Preferred Plus rates for people with mild or exercise-induced asthma. If you take albuterol or another bronchodilator daily, you can qualify for up to Standard rates.

Progressive

Progressive offers traditional life insurance policies, such as term life and whole life, as well as guaranteed issue policies that do not factor in your health. Term life is affordable and expires after a set number of years (usually 10 to 30 years), making it a good option if your COPD is well-managed and your loved ones would only need support if you passed away before retirement age. Whole life insurance lasts until you pass away and includes a cash value feature that allows for life insurance loans, making it a good option if you want to support your beneficiaries with a death benefit no matter when you die.

Frequently asked questions