Copd And Life Insurance: What's The Deal?

Chronic Obstructive Pulmonary Disease (COPD) is a serious health condition that affects millions worldwide and can impact a person's life insurance application. While it's possible to qualify for life insurance with COPD, the diagnosis may affect the terms of the policy and the premiums to be paid. The severity of the condition, medications, and treatment prescribed are some of the factors that determine eligibility and cost. Life insurance underwriters will also consider the applicant's overall health, lifestyle, and other factors to assess the risk and set the premiums accordingly.

Having COPD does not make you ineligible for life insurance

As COPD is a chronic and potentially progressive medical condition that can affect your life expectancy, insurance companies will consider you a "`high-risk` applicant". This means you will likely have to pay higher premiums or may even be denied coverage, depending on the severity of your condition.

The severity of your COPD will be a key factor in determining your eligibility and premium costs. Mild or well-managed COPD may result in more favourable rates, while severe or uncontrolled COPD will likely lead to higher premiums or a denial of coverage from some insurers.

Additionally, your smoking status will also impact your life insurance application. If you continue to smoke after being diagnosed with COPD, you will likely be considered high-risk and may be declined coverage. Quitting smoking can improve your health and potentially reduce insurance costs.

To increase your chances of getting affordable life insurance with COPD, it is recommended to apply through a broker who can shop the market and find the best option for your specific circumstances. Being honest and providing accurate information on your application is crucial, as it helps insurance companies assess your risk level accurately.

Furthermore, consider working with an experienced agent or broker who can guide you through the application process and help you find the most suitable policy for your needs and budget.

The severity of your COPD will determine the type of life insurance policy you can get

Guaranteed issue life insurance policies do not factor in your health and are a good option for those with severe COPD who have been declined for traditional coverage. However, these policies can be significantly more expensive and provide a lower death benefit. They also typically have a waiting period, during which your loved ones will only receive a partial payout if you die.

The type of life insurance policy you can get will depend on the specific details of your condition. Underwriters will want to know how long you have had COPD, the type of COPD you have, your symptoms, your treatment plan, and your prognosis. They will also take into account your overall health and lifestyle habits, such as whether you smoke or have any other medical conditions.

It's important to be honest and accurate when providing information to insurance companies, as this will impact your eligibility and premium costs. Working with an experienced agent or broker can help you navigate the application process and find the best policy for your needs and budget.

You can get guaranteed issue life insurance even with severe COPD

If you have severe chronic obstructive pulmonary disease (COPD), you may have trouble qualifying for a traditional life insurance policy. However, you can still get coverage by applying for a guaranteed issue life insurance policy, which does not factor in your health.

Guaranteed issue life insurance policies are available to those who struggle to qualify for traditional policies due to severe COPD. While these policies can be significantly more expensive and provide a lower death benefit, they are a viable option for those with severe COPD.

When applying for a guaranteed issue life insurance policy, you won't need to undergo a medical exam, and your health won't determine your eligibility. However, you may be required to complete a brief health questionnaire.

It's important to note that guaranteed issue life insurance policies typically have a two- or three-year waiting period before the insurance company will pay the full death benefit if you pass away from natural causes. Additionally, the death benefit is usually capped at a lower amount compared to traditional policies.

If you have severe COPD, it's advisable to consult with an experienced independent agent who can guide you through the application process and help you find the best policy for your specific needs and budget. They can also assist you in finding the most affordable rates and ensuring that you get the necessary coverage.

Furthermore, if you're still smoking, it's highly recommended that you quit, as this will improve your health and potentially reduce your insurance costs. Improving your overall health, quitting smoking, and effectively managing your COPD can positively impact your insurance rates and eligibility.

Life insurance rates for people with COPD are typically higher

If you have mild COPD, you may be rated as "Table B" and pay the standard rate plus 50%. For example, a 40-year-old male with mild COPD applying for a $500,000 20-year term policy would pay an estimated $90 per month if rated Table B. The standard price of this policy is an estimated $60, so the calculation is ($60 x 50%) + $60 = $90.

If your COPD is moderate, you may be rated as "Table D" and pay the standard rate plus 100%. For instance, a 40-year-old male with moderate COPD applying for a $500,000 20-year term policy would pay around $120 per month.

If your COPD is severe, you may be rated as "Table G" and pay the standard rate plus 175%. For example, a 40-year-old male with severe COPD applying for a $500,000 20-year term policy would pay approximately $165 per month.

If your COPD is extremely severe, you will likely be declined for a traditional life insurance policy. However, you may still be able to obtain a guaranteed issue policy, which does not factor in your health but can be significantly more expensive and provide a lower death benefit.

You can improve your chances of getting affordable life insurance by working with an independent agent or broker

While it is possible to get life insurance if you have COPD, the condition of your health will determine the terms of your policy and the premiums you will pay. If you have severe COPD, you may have trouble qualifying for a traditional policy. In such cases, you can apply for a guaranteed issue policy, which does not factor in your health but can be significantly more expensive and provide a lower death benefit.

Independent agents can be particularly helpful if you have complex insurance needs or are unable to find coverage. For instance, if you have a pre-existing medical condition like COPD, an independent agent who specializes in impaired risk underwriting may be able to find carriers who will insure clients with specific risks. They can also request information about your situation from the insurer before you formally submit an application.

Independent agents have the freedom to operate in a manner they feel comfortable with. They can choose to work on the fly by setting meetings with their clients in cafes and restaurants or at their homes or offices, whichever makes the client more comfortable. They can also offer multiple lines of insurance to their clients, which can help establish trust and improve client retention and referrals.

However, it's important to keep in mind that independent agents are paid a higher commission for selling pricier policies. If you're considering an expensive policy, such as permanent life insurance, you may want to consult a fee-only financial planner or insurance consultant to ensure it's appropriate for your needs.

Frequently asked questions