Term life insurance provides financial protection for your loved ones in the event of your passing. It pays out a lump sum that your beneficiaries can use to cover expenses, pay off debts, or invest for the future. However, qualifying for coverage can be difficult if you have a pre-existing medical condition.
Insurers view certain health conditions as higher risk, which makes it challenging to get approved. But it is still possible with some extra effort on your part. This guide will walk you through the key steps to take to boost your chances of securing term life insurance coverage despite having a pre-existing condition.
Understanding the Importance of Term Insurance
Term life insurance is a type of coverage that provides a death benefit payout if you pass away during a defined period, known as the “term.” Terms usually range from 10 to 30 years. Premiums also remain level during the term and only increase if you renew your policy after the term expires.
This type of insurance is appealing because it offers pure protection. There is no cash value building up, like with permanent life insurance products. Instead, term insurance provides an affordable way to guarantee your loved ones will receive financial support in the event of your death.
For those with health issues, term life insurance can provide peace of mind that your family will have help covering expenses even if you cannot qualify for other types of life insurance. That makes taking steps to get approved incredibly important.
Exploring Eligibility Restrictions for Term Insurance
Insurers ask about your medical history and may require a physical exam before approving your application. They want to understand all the health risks you may pose to appropriately price your policy.
Certain conditions are considered high-risk by insurers. These include chronic illnesses like diabetes, heart disease, and cancer, as well as lifestyle factors like smoking or obesity. Having one or more of these pre-existing conditions can lead an insurer to deny coverage, rate you in a higher-risk category, or exclude death benefits for deaths related to the condition.
While eligibility restrictions can be frustrating, remember that insurers need to manage risk across their entire pool of policyholders. Your best approach is to be as healthy as possible and transparent about your situation to boost your chances of approval.
How to Qualify for Term Insurance with Pre-Existing Health Conditions
Gather and Organize Your Medical Records
Insurers will request medical records about any conditions you disclose on your application. To speed up the underwriting process, take steps to gather this information ahead of time. Contact your doctors to get copies of your latest lab tests, exam notes, hospital discharge reports, and any other documentation related to your condition.
Make sure you have at least a few years’ worth of records so the insurer can evaluate how well your condition has been managed over time. Having this paperwork organized shows you are an informed and responsible insurance candidate, despite your health history.
Research Insurance Providers that Cater to Pre-Existing Health Conditions
While every insurer will evaluate applicants with health issues on a case-by-case basis, some companies may be more lenient toward specific conditions. For example, some insurers specialize in covering diabetic candidates, while others focus on heart health.
Do some research to find carriers that regularly provide policies to applicants with your condition. Their underwriters may better understand how to appropriately rate and manage such risks. Working with an experienced broker can help guide you toward the right companies to apply to.
Be Honest and Transparent About Your Health History
Trying to hide a pre-existing condition is never a good idea. Insurance applications specifically ask if you have been diagnosed with or treated for several common conditions. If you fail to disclose something and the insurer later finds out, they may void your policy on the grounds of fraud.
Instead, be upfront about your medical history from the very start. Provide all records related to your diagnosis, treatment plan, and recent health status. The more information you willingly provide, the more comfortable an underwriter will feel taking on the risk you pose.
Consider Working with an Insurance Professional
An independent insurance broker can advocate on your behalf and help match you with carriers amenable to health conditions like yours. Brokers have experience submitting high-risk life insurance cases and getting them approved.
A broker may also have better luck securing your life insurance at a reasonable rate than you could find on your own. So partnering with one can be invaluable for getting coverage despite pre-existing issues.
Explore Alternative Options such as Guaranteed Issue Policies or Group Coverage
There are still options to obtain coverage if multiple insurers decline you despite taking all reasonable precautions.
Guaranteed-issue life insurance policies are available to all eligible candidates, regardless of health. The tradeoff is that benefit amounts are usually quite low, around $25,000 or less. While not ideal for sole protection, guaranteed-issue insurance can provide a small payout for final expenses.
Additionally, some employer and affinity group plans offer guaranteed coverage options. The benefit amounts are also modest but do not require medical underwriting. Check if any organizations you belong to provide access to a group life insurance plan that could cover you.
Tips for Improving Your Chances of Approval
Focus on Managing and Treating Your Health Condition
Get any chronic or serious health conditions under control through diet, lifestyle changes, medications, or other interventions recommended by your physician. Sticking to your treatment plan shows insurers that you are committed to managing your health risks.
Also, consider joining a disease management program. These programs provide education and tools to help you better understand and self-manage your condition. Participating in one signals to underwriters that you are actively addressing your health issues.
Maintain a Healthy Lifestyle
Adopting healthy habits can help offset insurers’ concerns over pre-existing conditions. Make positive lifestyle changes like eating better, exercising regularly, losing weight, reducing alcohol consumption, and quitting smoking.
Over time, this can lead to improved lab results and other health metrics that provide objective evidence of your lower risk profile. Getting letters from your doctors documenting your progress can further help your case.
Work on Improving Your Credit Score
Insurers often take your credit-based insurance score into account during underwriting. Policy applicants with higher scores tend to get approved more often and at better rates.
Pay down debts, check reports for errors, and otherwise focus on boosting your credit standing. This shows financial responsibility that may help offset concerns about your health.
Consider Temporary or Short-Term Coverage as a Bridge Solution
If you need life insurance right away but expect your health to improve over the next year or so, short-term coverage could make sense. Plans with terms ranging from 1 to 3 years are available that offer a small death benefit to protect loved ones in the interim.
Later on, if your condition stabilizes or you adopt healthier habits, you can reapply for longer-term coverage with a better chance of approval. Just make sure to start the application process
a few months before your temporary policy expires, so you do not end up with a coverage gap.
Conclusion
Getting approved for life insurance with pre-existing conditions requires some extra effort but is possible. By researching carrier options, transparently disclosing your health history, improving modifiable risk factors, and considering alternative policy types, you can obtain the coverage you need.
While you may not qualify for the lowest rates, taking proactive steps to manage your health issues can still earn you reasonable premiums for the term life insurance protection your loved ones deserve. With persistence and the help of an experienced insurance broker, you can secure a policy that offers peace of mind despite your medical situation.
FAQ:
Which insurance company provides term insurance for a person with pre-existing diseases?
Several insurance companies provide term insurance for individuals with pre-existing conditions. However, the disease should be under control as per the norms of the insurer.
As per my knowledge, Bajaj Allianz Life Insurance has introduced a dedicated diabetic term insurance plan.
It’s important to note that each insurance company has its underwriting guidelines and may have different criteria for approving coverage. It’s recommended to work with an experienced insurance professional who can help you find the best policy options based on your specific pre-existing condition.
Why don’t more people lie and say that they have no preexisting conditions? Will the insurance company ever really find out for sure?
- Lying about pre-existing conditions to an insurance company can lead to severe repercussions. Insurers have advanced methods to uncover the truth, including medical examinations and cross-referencing with databases like the Medical Information Bureau (MIB).
- Moreover, insurance policies have a contestability period during which the insurer can review the policy for false statements. If caught, individuals could face fines, cancellation of the policy, and even legal action.
- The best policy is to be honest when applying for insurance
Further Reading
Check out the following resources to continue learning about life insurance:
