- Depending on your pre-existing health condition, you may be able to get traditional life insurance.
- However, you will have to find an independent broker and may have higher premiums.
- An alternative is no medical exam life insurance, like guaranteed or simplified issue insurance.
- Compare life insurance online in minutes with Everyday Life Insurance.
Depending on your pre-existing condition, you may still qualify for traditional life insurance. However, you may see increased premiums on your policy. You can qualify for no medical exam life insurance if you can't get life insurance due to your pre-existing condition. The downside is that your death benefit or coverage amount is limited, and your premiums will be higher.
What is a pre-existing condition?
Pre-existing conditions are health problems that exist before you apply for coverage. According to HealthCare.gov, common pre-existing conditions include asthma, diabetes, and cancer.
Life insurance companies evaluate pre-existing conditions based on risk. For example, asthma diagnoses have a different risk valuation than cancer. If you have cancer, most life insurance providers will have a waiting period — usually five years — before you become eligible for traditional life insurance.
How pre-existing conditions affect life insurance
The underwriting process is how the insurance company determines your insurability. This process evaluates how much of a risk you are and how much to lend you. During the underwriting process, the company collects information about your medical, job, income, finances, and other personal information.
Traditional life insurance policies require a medical exam, which includes a blood test and urine sample, as part of the underwriting process. If a health issue is discovered during the exam process, you may find it more difficult to obtain coverage.
Based on your medical exam, insurers assign a risk assessment category and calculate your premiums based on this category. Here's an overview of the different risk classifications used by insurance companies:
Risk Classification | Definition |
Preferred Plus/Elite |
|
Preferred |
|
Standard Plus |
|
Standard |
|
Substandard |
|
Smoker |
|
Data sourced from NAIC and Quotacy
Comparing no-exam life insurance options
If your pre-existing health condition makes you ineligible for traditional life insurance, no medical exam life insurance is an option. The benefit of no medical exam life insurance is that acceptance is typically guaranteed.
However, not knowing your medical history means the insurance company is taking a gamble on your health. So, insurers offer limited coverage amounts — usually up to $100,000 — and enforce a waiting period before your beneficiaries can file a claim.
There are two types of no medical exam life insurance: guaranteed issue and simplified issue.
Guaranteed issue life insurance
Guaranteed issue life insurance doesn't require a medical exam or medical questionnaire. This policy is sometimes referred to as "final expense" insurance because the coverage amounts are so low that it basically only covers funeral and burial expenses.
Most guaranteed issue life insurance policies have a two-year waiting period. This means that if the policyholder dies within the first two years of having coverage, the policy won't pay out. Also, you must be 50 and over to qualify.
For guaranteed life insurance, your premium depends on your age, gender, where you live, and coverage amount. Be aware that coverage amounts are limited and vary by insurance provider.
Simplified issue life insurance
Simplified issue life insurance doesn't have age restrictions or require a medical exam. However, you'll need to complete a health questionnaire, though it won't be as extensive as traditional life insurance. Also, death benefit amounts are higher than with guaranteed issue life insurance.
Like guaranteed issue, some simplified issue no medical exam life insurance policies have a two-year waiting period, according to Colonial Penn.
Types of policies available
Traditional term and permanent life insurance
Term life insurance offers temporary coverage for a designated period of time, usually between 10 to 30 years. This policy is the least expensive type of insurance, making it accessible to shoppers with good health on a tight budget.
Unlike term life insurance, permanent life insurance offers lifelong coverage. It also comes with a cash value component, which allows you to save or invest a portion of your premiums to increase your policy's value. However, because of its benefits, permanent life insurance is more expensive than term life.
Two common permanent insurance policies are whole life and universal life insurance. With a whole life insurance policy, you pay a fixed premium for a guaranteed death benefit. The policy's cash value also grows at a fixed interest rate.
With a universal life policy, you can adjust your premiums and death benefit amount when you need to. For example, you may want to lower your death benefit when your children become adults and move out. As a result of lowering your death benefit, your premiums decrease.
Tips for applying with pre-existing conditions
Take a look at the following life insurance application tips for medical conditions.
Comparing policies and insurers
Comparing insurance policies from various insurers will help you find the best price for the coverage you need. The Insurance Information Institute recommends gathering quotes from at least three companies. If you don't know where to start, consider asking your friends or family for referrals. You can check out our guide on the best life insurance companies.
While finding a policy that fits your budget is important, the lowest price isn't all you should be looking for. You should evaluate each company's reputation by checking their financial stability and customer satisfaction. Additionally, look at online reviews from rating agencies like Trustpilot, the Better Business Bureau, and ConsumerAffairs., to see what real users are saying about the company.
Working with insurance brokers
Unlike auto or renters insurance, most life insurance companies don't offer online quoting tools on their websites. So, you'll likely have to call each company to obtain an estimate.
Unfortunately, this can be time-consuming. To expedite the quote comparison process, consider working with an insurance broker to compare multiple quotes at once.
Mark Williams, CEO of Brokers International, told Business Insider that people with pre-existing medical conditions should use independent agents while shopping for life insurance. Companies underwrite differently, and agents would know which ones are more flexible when it comes to pre-existing health conditions and other high-risk factors.
Disclosing medical history accurately
Since insurance companies cross-check your information with medical records, concealing a pre-existing condition will likely result in your application being denied.
Even if your insurer approves you for coverage, it doesn't mean it's guaranteed. Insurers have what is called a contestability period. If you die within two years of your policy, your insurance company can refuse to pay your beneficiaries a death benefit if they find out you've misrepresented information on your application.
Life insurance with pre-existing conditions FAQs
While pre-existing conditions can influence premiums, the extent varies by the severity and frequency of the health issue. For example, insurers will likely view someone with asthma as less risky to insure than someone with a terminal illness. However, risk valuation methods and criteria vary by insurance company.
Yes, based on the type of pre-existing condition, insurance companies can deny life insurance coverage. Some policies, like guaranteed issue life insurance, don't require medical underwriting, making it easier to qualify for. However, these policies may come with higher premiums and limited benefits.
It's important to disclose your medical history, including diagnosis, treatment, and management to avoid the risk of your application being rejected or your policy being voided.
Consider consulting an insurance broker with experience working with high-risk applicants. They point you in the direction of the best policies and insurers for your specific situation.
Guaranteed issue and simplified issue life insurance don't require a medical exam. However, these policies tend to have higher premiums and graded death benefits.
