Health Conditions That Void Life Insurance Policies

Life insurance is a crucial step toward protecting your family's financial future, but some applicants are considered uninsurable due to health or risk factors. While no specific medical condition universally disqualifies someone from life insurance, certain severe or chronic illnesses can make obtaining coverage more difficult or expensive. This includes conditions like late-stage cancer, Lou Gehrig's disease, kidney failure, cognitive impairments, and more. Pre-existing conditions can also impact the cost of life insurance, with insurers using age and health as the most important factors to determine insurability and cost. However, it's important to note that even with health issues, there are still options for obtaining life insurance, such as group life insurance, guaranteed issue life insurance, or alternative financial strategies.

Cancer

If you have or have had cancer, you may find it more difficult to get life insurance. However, it is not impossible, and there are steps you can take to improve your chances of getting covered.

Factors Affecting Insurability

The type of cancer, the stage it is at, and your prognosis will all be taken into account by insurance companies when determining your eligibility and premiums. The greater the risk to the insurer, the higher the premiums will be. For most cancers, the risk of the cancer returning decreases over time, so the longer you have been in remission, the lower your premiums are likely to be.

Applying for Life Insurance

When you apply for life insurance, the insurance company will evaluate your application to determine how much risk you pose. This process is called underwriting. The underwriters will carefully review pathology and staging reports, treatments given, any possible adverse effects related to treatment, and your follow-up appointments. They will also consult the National Cancer Institute's SEER database, which gives companies an idea of life expectancy based on diagnosis and stage.

Improving Your Chances

It is important to be honest about your medical history when applying for life insurance. Misrepresenting your health could result in your beneficiaries' claims being rejected. You can improve your chances of getting covered by working with an independent broker who can shop the market for you and find the most lenient companies. You can also take out a guaranteed issue life insurance policy, although these tend to be significantly more expensive.

Existing Life Insurance Policies

If you already have a life insurance policy and are then diagnosed with cancer, the insurance company should honour it as long as you were honest about your medical history when taking out the policy. You may find it difficult to increase the value of your policy for some years, but it is important to keep it up rather than starting a new life insurance policy after your diagnosis.

Cognitive impairments

Understanding Cognitive Impairments

Life Insurance Options for Individuals with Cognitive Impairments

If you or a loved one is living with a cognitive impairment, it is important to know that life insurance options may be limited. Traditional life insurance policies may not be available, but there are alternative options to consider:

• Guaranteed issue life insurance: This type of policy does not require a medical exam or health questionnaire, making it accessible to those with cognitive impairments. However, the death benefit may be limited, and the policy may be more expensive.
• Simplified issue life insurance: These policies may have a waiting period before full coverage begins, but they can provide coverage for individuals with cognitive impairments.
• Group life insurance: If you are employed, your employer may offer group life insurance as a benefit. Acceptance is often automatic, but the coverage amount is typically limited, and the policy is only valid while you are employed.
• Accidental death and dismemberment insurance: This type of insurance pays out a benefit if death occurs due to an accident, regardless of the insured's medical history. However, it is important to carefully review what accidents are covered and understand how pre-existing conditions can affect the payout.

Tips for Applying for Life Insurance with a Cognitive Impairment:

• Be mindful of timing: If you have recently been diagnosed with a cognitive impairment, it may be best to wait before applying for life insurance. Insurers may require a waiting period to assess treatment and recovery.
• Seek expert advice: Consult an independent life insurance agent or broker who has experience with impaired risk cases. They can guide you towards insurers that are more likely to offer favourable rates for your specific condition.
• Be transparent: Disclose your medical history and condition honestly. Failing to do so may result in the cancellation of the policy or denial of a claim.
• Shop around: Different insurers have varying underwriting criteria, so it is worth obtaining quotes from several providers to find the best coverage and rates for your situation.

High-risk activities

Engaging in high-risk activities can significantly impact your life insurance application and premiums. Life insurance companies view such activities as risk factors, which are elements that increase the likelihood of them having to pay out a claim. These activities can range from extreme sports to dangerous hobbies and occupations. Here's what you need to know about how high-risk activities can affect your life insurance:

Types of High-Risk Activities

Extreme Sports:

• Skydiving or parachuting
• Mountaineering or winter mountaineering
• Base jumping
• Competitive go-karting
• Racing of any kind, including boat and car racing
• Some types of boating
• Rock climbing or abseiling

Dangerous Hobbies:

• Flying private planes
• Scuba diving
• Off-piste skiing or snowboarding
• Motorsport

High-Risk Occupations:

• Working at heights (12 metres or higher)
• Jobs with very high mileage, such as long-haul truck drivers
• Working in hazardous environments like construction sites
• Working underwater or underground
• Working with explosives, pyrotechnics, or dangerous chemicals
• Operating heavy machinery
• Regularly undertaking heavy lifting
• Jobs in law enforcement or the military, which often involve life-threatening situations

Impact on Life Insurance

Participating in high-risk activities can have several consequences when it comes to life insurance:

• Increased Premiums: Life insurance companies may charge higher premiums to individuals who engage in high-risk activities. The amount of the increase will depend on the specific activity and the insurer's perception of its danger level.
• Declined Applications: In some cases, insurers may decline your application altogether due to the potential for an early claim.
• Specialist Insurers: You may need to seek out specialist insurers or impaired risk teams within insurance companies that are more flexible and lenient towards high-risk activities.
• Disclosure: It is crucial to be honest and disclose any high-risk activities on your life insurance application. Non-disclosure or concealment of such activities may result in denied claims or even insurance fraud accusations.
• Background Investigations: Life insurance companies may conduct background investigations, including checking your medical history for injuries related to dangerous activities. A pattern of injuries may indicate regular participation in high-risk activities.
• Period of Contestability: Many life insurance policies have a "period of contestability," typically the first two years, during which the insurer can decline to pay benefits if there was a material omission in your application, such as failing to disclose a high-risk activity.
• High-Risk Occupations: If you work in a high-risk occupation, you may be offered coverage through specialised policies like military life insurance or police life insurance.

Tips for High-Risk Individuals

If you engage in high-risk activities, here are some tips to help navigate life insurance:

• Shop Around: Different insurers assess risk differently, so it's essential to compare quotes from multiple providers to find the most favourable rates and coverage options.
• Disclosure is Key: Always disclose your high-risk activity on your application. While it may result in higher premiums, it ensures that your life insurance benefits cannot be contested upon your death.
• Specialist Support: Consider seeking assistance from specialist impaired risk teams within insurance companies or brokers who have experience helping high-risk individuals secure coverage.
• Improve Insurability: Focus on managing your health and maintaining a healthy weight, as this can positively impact your insurability and potentially lower your premiums.
• Consider Alternative Options: If traditional life insurance is not an option, explore alternatives like group life insurance through your employer or guaranteed issue life insurance, although these may have lower coverage amounts and higher costs.

Uncontrolled diabetes

When applying for life insurance, individuals with uncontrolled diabetes may be subject to a medical underwriting process, which includes a questionnaire and a physical exam. Insurers will evaluate the type of diabetes (Type 1, Type 2, or Gestational), the age of onset, the methods used to control blood sugar levels (such as diet, exercise, medication, or insulin), and any related health complications. The severity of diabetes will also be assessed through blood tests, such as A1C or glucose tolerance tests.

The cost of life insurance for individuals with uncontrolled diabetes will depend on various factors, including age, lifestyle, driving record, and the specific complications arising from diabetes. Insurers will place applicants in risk categories, with higher-risk individuals paying more for coverage.

To obtain life insurance with uncontrolled diabetes, it is advisable to shop around and compare quotes from multiple insurers, as they differ in their assessment of diabetes. Additionally, working with a broker who specialises in high-risk applicants can be beneficial. Group life insurance through an employer is another option to consider, as acceptance is often automatic, although the coverage amount may be limited.

It is essential to be honest about your health condition when applying for life insurance. Misrepresenting or concealing your health status may result in claim rejection or policy cancellation.

Kidney failure

Impact on Life Insurance

• Insurability: Kidney failure may not automatically disqualify you from obtaining life insurance, but it could make it more challenging and expensive. The specific impact will depend on the insurer's underwriting process and their assessment of your risk profile.
• Health Factors: The severity of your kidney failure, your overall health, and any underlying conditions will be considered. Factors such as high blood pressure, diabetes, and abnormal kidney structure can increase the risk associated with kidney failure.
• Treatment Options: The treatment you are undergoing for kidney failure will be a significant factor. Dialysis or a kidney transplant may improve your insurability, as these treatments can sustain your life and slow down the progression of the disease.
• Medical History: Insurers will evaluate your medical history, including any previous injuries, surgeries, or underlying conditions that may have contributed to kidney failure. They may also consider your family history of kidney disease.
• Lifestyle Factors: Your lifestyle choices, such as smoking, diet, exercise habits, and participation in risky activities, can influence the insurer's decision and the cost of coverage.
• Waiting Periods: If you have recently been diagnosed with kidney failure or undergone treatment, insurers may require a waiting period before offering coverage. During this time, they may monitor your health and assess your response to treatment.
• Alternative Options: If you are denied traditional life insurance, there are alternative options such as group life insurance through your employer or guaranteed issue life insurance, which offers limited coverage without a medical exam.

In summary, while kidney failure is a significant health condition that can impact your insurability, it does not necessarily make you uninsurable. The key factors lie in the severity of the condition, the effectiveness of treatment, and the insurer's assessment of your overall health and risk profile. It is important to shop around, be transparent about your medical history, and work with an agent or broker who can advocate for your specific circumstances.

Frequently asked questions