Life Insurance Options For People With Health Issues

Life insurance is a financial safety net for your loved ones after you pass away. But what if you have a pre-existing health condition? Can you still get life insurance? The short answer is yes, but it may be more challenging and expensive. Pre-existing conditions are health issues that existed before applying for coverage, and they can affect your insurability and premium costs. Age, health, lifestyle, and gender are key factors in determining your rates. People with pre-existing conditions often face higher premiums or even coverage denial. However, shopping around and working with independent agents can help find policies that fit specific health needs. Being honest about your health is crucial, as lying on applications may result in disqualification or premium increases. Group life insurance through employers and guaranteed issue life insurance are alternative options for those struggling to find traditional coverage.

Pre-existing conditions and life insurance

Pre-existing conditions can make it more difficult and expensive to get life insurance. However, even if you have a chronic or terminal health problem, you can likely find a policy that suits your needs if you shop around. The specific policy types you qualify for will depend on your particular medical problems, how well your condition is managed, and the insurer.

According to the Centers for Medicare and Medicaid Services (CMS), as many as half of all adults under the age of 65 have some form of a pre-existing medical condition. These chronic conditions range from asthma and diabetes to heart disease and HIV infection.

When you apply for life insurance, a pre-existing condition might be any health problem that could affect your longevity, and each insurer qualifies them differently. Due to the added risk, some pre-existing conditions can raise your premium or even disqualify you entirely from certain types of life insurance.

Some common pre-existing conditions include:

• High blood pressure
• Diabetes
• Cancer
• Asthma
• Anxiety and depression
• Previous injuries, depending on their severity and any lasting effects

If you develop a serious condition after you already have life insurance, it won't affect your rates. Your life insurance premium will remain the same for the length of your policy.

When you apply for life insurance, the insurance company may ask questions about your age, fitness level, lifestyle, and medical history. They may also ask about your family medical history and, in many cases, require you to undergo a medical exam to qualify.

• Stick to your treatment plan: Demonstrating adherence to your treatment plan shows the insurer you're managing your condition.
• Get regular exercise: Regular exercise keeps you healthy overall and can reduce the risks or symptoms of your pre-existing condition.
• Lose weight, if necessary: Getting to a healthy weight can lead to a range of positive health effects, such as reduced blood pressure and better blood sugar control.
• Shop around for insurance: Insurance coverage costs and terms can vary between insurers. Shopping around can help you find insurers willing to offer coverage despite your pre-existing condition.

If you don't get approved for life insurance, there are still options available, such as:

• Re-applying after your condition improves
• Exploring guaranteed issue life insurance, which approves all applicants but offers lower coverage
• Group life insurance through your employer, which often doesn't consider health conditions but has limited coverage
• Accidental death and dismemberment insurance, which is not based on your medical history but has specific requirements for payout

Mental health and life insurance

Mental illness is common, with around one in five adults in the US experiencing mental health issues each year. Despite this, people with mental health conditions can find it challenging to obtain life insurance. However, it is not impossible, and there are several options available.

Impact of Mental Health on Life Insurance

Mental health conditions can impact life insurance eligibility and premiums. Insurance companies consider mental health issues a health risk as they can affect physical well-being and daily functioning. The specific mental health diagnosis, severity, treatment history, and impact on daily life all play a role in the insurer's evaluation. Some conditions, such as severe depression, bipolar disorder, or schizophrenia, may result in higher premiums or even denial of coverage due to their association with an increased risk of suicide.

Types of Life Insurance for People with Mental Health Issues

People with mental health issues have several options for obtaining life insurance:

• Term life insurance: This is a popular option as it is affordable and can provide coverage for a set period, usually between 10 and 30 years. However, recent hospitalizations or in-patient treatment for mental health issues may lead to higher premiums or postponement of the application.
• Whole life insurance: People with complex financial planning needs can opt for this type of permanent life insurance, which includes an investment component. Similar to term life insurance, recent hospitalizations may impact eligibility.
• No-medical-exam life insurance: Some companies offer life insurance without a medical exam, which can be advantageous for people with mental health issues. Instead, they may require a health questionnaire.
• Guaranteed issue life insurance: This type of life insurance does not require a medical exam or health questionnaire and offers almost certain approval. However, it is more expensive and has lower coverage limits, usually below $50,000.
• Group life insurance: Obtaining life insurance through an employer can be easier for people with mental health issues as the insurer accepts a mix of high-risk and low-risk employees. It is also often more affordable.

Factors to Consider when Applying for Life Insurance with Mental Health Issues

When applying for life insurance with a mental health condition, it is essential to be honest and disclose all relevant information. Lying or omitting details about your mental health can be considered insurance fraud and can have serious consequences. Be prepared to answer questions about your diagnosis, treatment history, hospitalizations, impact on daily life, and ability to work. It is also crucial to have consistent treatment and follow your doctor's recommendations to improve your chances of obtaining coverage at affordable rates.

Improving health to get better rates

While having a medical issue doesn't automatically disqualify you from buying life insurance, it may result in less choice and higher costs. However, if you already have a life insurance policy and your health has improved, you can request an evaluation of your current premium. Improvements in your health that can lead to better life insurance rates include healthy blood pressure readings, improved cholesterol values, improved liver function, and sustained weight loss.

Maintain a healthy weight

Eating better and staying active can help you maintain a healthy weight, which can decrease your risk of high blood pressure, high cholesterol, heart attack, stroke, diabetes, or heart disease. Insurance carriers may charge lower life insurance rates to those with a healthy height-to-weight ratio, so improving your weight can increase your chances of obtaining the lowest possible insurance rate.

Stop smoking

If you've smoked at all in the last 12 months, you will be given a more costly smokers' rate. Tobacco use is considered extremely dangerous as it may lead to many health issues, and users are considered a higher risk. If it's been a year or more since you quit, you'll qualify for non-smoking rates. Requirements differ for each insurer, but generally, insurance companies want your last cigarette to be five years in the past before they consider you for their best rates.

Reduce alcohol consumption

While reasonable consumption of alcohol won't affect your premiums, your life insurance provider could take a look at whether you've abused alcohol when determining your rate. Stay smart about drinking, and your wallet shouldn't take a hit.

Exercise regularly

Exercising regularly can help mitigate most of the factors that make a person risky to insure. Check with your doctor before starting an exercise regimen, especially after a serious health event. Even if you can't do strenuous exercise, simple activities like walking can provide significant benefits.

Follow your treatment plan

If you have a pre-existing condition, following your treatment plan can help increase your chances of maintaining and improving your health and insurability. This will also help a potential insurer see that your condition is well-controlled, which may lead to better rates.

Group life insurance

Coverage amounts are usually limited to a multiple of the policyholder's annual income, which may not align with your needs. Group life insurance plans are not as customisable as private policies, either. However, if you only need coverage to supplement existing life insurance or don’t need a large amount to satisfy your needs, group life insurance may be a good option.

Guaranteed issue life insurance

These policies guarantee acceptance as long as you are within a certain age range, which is usually between 45 or 50 and 80 or 85 years old. The specific qualifications vary based on your age and location.

There is also a waiting period of two to three years before the benefits go into effect. If the policyholder dies within the waiting period, and the cause of death is non-accidental, the beneficiary will not receive the death benefit. Instead, the insurance company will pay the beneficiary all the paid premiums back with interest.

Pros of guaranteed issue life insurance include:

• It provides coverage for those who may usually have a difficult time getting life insurance.
• It saves time by avoiding a trip to the doctor's office and skipping the medical exam and medical questions.
• The policyholder can scale the death benefit up and down, usually somewhere between $2,000 and $25,000.

Cons of guaranteed issue life insurance include:

• The plans are usually more expensive than typical term and whole life policies because they are considered riskier.
• There is an initial waiting period during which the benefits are not accessible.
• If the policyholder dies within the waiting period, the beneficiaries will not receive the death benefit.

Frequently asked questions