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Understanding Life Insurance With Pre-Existing Conditions

Jan 11, 2023 | Insurance, Life Insurance

When you apply for life insurance, you will usually need to complete a health questionnaire and take a medical exam. The point of the exam is to identify potential health risks and underlying conditions. Pre-existing conditions could complicate the process of getting life insurance. Our team at Alliance Income is here to provide some key facts about getting life insurance with pre-existing conditions. 

Can I Get Life Insurance If I Have a Pre-Existing Condition?

Yes, you can still get life insurance if you have a pre-existing condition. Pre-existing conditions might result in higher monthly premiums or lower coverage limits, but they do not necessarily mean you will get rejected outright. Even if one insurance company rejects you due to pre-existing conditions, it does not mean that other companies will. 

What Counts as a Pre-Existing Condition?

A pre-existing condition is any chronic illness or injury you have before applying for life insurance. Pre-existing conditions don’t just include conditions with specific diagnoses but can also include long-term effects from another illness (e.g., respiratory damage from COVID-19). Any medical condition that affects life expectancy can count as a pre-existing condition. 

Also, insurance companies might look at your family’s medical history to identify potential pre-existing conditions. If your immediate relatives have a history of illness (e.g., cancer, cardiovascular disease, etc.), you may have to pay higher monthly premiums. 

Below are some of the most common examples of pre-existing conditions that can affect life insurance coverage.

Have Specific Questions About Life Insurance With Pre-Existing Conditions?

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High Blood Pressure

High blood pressure raises the likelihood of heart attack and stroke. Most insurance companies will not deny coverage due to high blood pressure, but it can affect monthly premiums. Insurance companies calculate risk from high blood pressure differently, and some won’t count you as high risk if you keep your blood pressure low for 12 consecutive months. 

Diabetes

Nearly 11 million Canadians have diabetes or prediabetes, meaning that diabetes is one of the most common pre-existing conditions insurance companies encounter. If you have diabetes, you will be more likely to get coverage if you are not overweight, do not have insulin dependence, and do not have kidney damage.

Life insurance companies prefer to insure people who have lived with diabetes for more than three to five years. People who have had diabetes for a few years but are in decent health demonstrate they can responsibly manage their condition. 

Smoking

Smoking is one of the most significant pre-existing conditions for life insurance. Smokers show a higher risk of heart attack and lung cancer and have a lower life expectancy than non-smokers. Several reports have shown that smokers, on average, pay anywhere between two to four times more than non-smokers for life insurance coverage. 

Most insurance companies require you to quit smoking for at least 12 months for them not to count it as a pre-existing condition. You might be able to reduce premiums if you show that you are taking part in a smoking cessation program. Our team has compiled some information on what the best life insurance policies for smokers are. Read about our top 3 picks here.

Cancer

Cancer is another common pre-existing condition that insurance companies consider. Cancer treatments have significantly advanced in recent years, but many companies still consider cancer a high insurance risk. Insurance companies will be more likely to insure you if you have a highly treatable variant or if your cancer has been in remission for two or more years. This topic is explained in great detail by Insurdinary.ca.

Stroke/Heart Attack

Insurance companies will also ask if you have ever had a stroke or a heart attack. Your odds of coverage are higher if you did not sustain permanent damage and are otherwise in good health. You will also be more likely to get coverage if you have low blood pressure and cholesterol. The list of questions that an insurer will ask you when trying to acquire life insurance after a stroke is quite extensive. Learn more about what to expect from your insurer here.

HIV/AIDS

Although there have been major advances in treatment, most insurers will still consider HIV or AIDS a pre-existing condition. Insurance companies are more likely to insure HIV-positive people if they have had the condition for at least three years and show that medication is effective at managing symptoms. 

Transplants

Transplant patients can still get life insurance coverage even if they take immunosuppressant drugs. If you take good care of your body, get regular exercise, and eat healthy, you can increase the chances of approval and lower your rates. 

How Do Pre-Existing Conditions Affect Life Insurance Coverage?

Insurance companies do not treat all pre-existing conditions the same. Some conditions are riskier than others and present a higher mortality risk, statistically. Insurance companies also look at external factors when making coverage decisions. 

Condition

Some pre-existing conditions present more risks than others. For example, someone with arthritis will have an easier time finding coverage and will pay lower premiums than a smoker with lung issues. Insurance companies are less discriminating with conditions that don’t statistically lower life expectancy.  

Current Health

Having good current health can maximize your chances of coverage. If you are proactive about your condition and take steps to manage it, you can reduce a large amount of risk. 

Time Since Diagnosis

Generally, you are riskier to insure the longer it has been since your diagnosis. Some exceptions exist to this rule, however. In some cases, if you have had a condition for more than three years and are in good health, insurance companies will take that as a sign that you can responsibly manage your condition. 

Age/Lifestyle

Younger people will have an easier time finding life insurance coverage, even if they have a pre-existing condition. If you engage in high-risk behaviours, like drinking or recreational drug use, you may have to pay higher monthly premiums. 

Why Do Insurance Companies Care About Pre-Existing Conditions?

Life insurance companies, like any business, make money by selling products at prices higher than they cost to provide. When a life insurance company approves you for a policy, they are essentially making a bet that they will collect more in premiums than they will pay in death benefits. 

This factor is why life insurance companies care about pre-existing conditions—some conditions increase the likelihood of early death and increase the risk that the insurance company will have to pay a death benefit. If the company thinks the pre-existing condition is risky enough, it can deny coverage or charge higher premiums. 

Life Insurance Options for People With Pre-Existing Conditions

People with pre-existing conditions have several options for life insurance. Some types of insurance policies are more discriminating, and it will be more difficult to get coverage if you have complications from your pre-existing conditions. 

Term Life Insurance

Term life insurance is one of the most common types of life insurance in Canada. Term policies provide coverage for a specific timeframe, and you pay a monthly premium to keep the policy active. Term life insurance policies can range anywhere between five and 30 years, but most are ten to 20 years. 

Term policies are easy to understand and have predictable premiums. If your pre-existing condition is not likely to cause medical problems during the term, you are more likely to qualify with a reasonable rate. 

Permanent Life Insurance

Permanent life insurance provides lifelong coverage as long as you continue to pay the premiums. Permanent life insurance is for people with no or minor pre-existing health conditions, like well-managed blood pressure. If you qualify for permanent insurance with a pre-existing condition, it will be a rated policy with high monthly premiums. 

Simplified (No-Medical) Life Insurance

Simplified life insurance provides coverage without having to take a medical exam but includes a medical questionnaire. Simplified life insurance is easier to qualify for than term or permanent insurance, so it is a viable option if you have a pre-existing condition. 

The downside is that simplified policies usually have lower coverage limits and higher premiums. You can also fail to qualify if you have significant complications from pre-existing conditions. Note that you may still have to pay higher premiums for a rated policy if you qualify. 

Guaranteed Life Insurance

Guaranteed life insurance provides a guaranteed death benefit and does not require a medical exam or a health questionnaire. You can qualify for a guaranteed life insurance policy regardless of your or your family’s medical history. Because of the increased risks, guaranteed policies have low limits—about $25,000 to $50,000.

The upshot is that you get a guaranteed payout if you die. Keep in mind that many guaranteed life insurance policies have a one- to two-year buffer period after purchasing before coverage goes into effect. 

When to Apply for Life Insurance With a Pre-existing Condition

It is important to understand that the simple presence of a pre-existing condition will not disqualify you from life insurance coverage. If you maintain your health and have not experienced any adverse health changes in the past two years, insurance companies will be more likely to provide coverage at an affordable rate. 

If you have a pre-existing condition, it is better to apply for life insurance when you are young, and the condition will likely not cause you problems. The longer you wait, the more likely you’ll experience a medical complication, and it will be harder to get adequate coverage.

It is crucial that you are honest about pre-existing conditions when applying for life insurance. If you lie on an application or misrepresent your medical history, it could void your policy. Insurance companies would have grounds to deny a claim after you pass away. 

Deciding What Type of Life Insurance is Best for You?

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How to Buy Life Insurance With a Pre-Existing Condition

Pre-existing conditions might make it more difficult to shop for life insurance, but they do not make it impossible. You can do several things to increase your chances of getting approval for a reasonable monthly premium. 

  • Stay healthy. You can proactively manage many pre-existing conditions and reduce mortality risks by staying active and healthy. Insurance companies are more likely to provide coverage if you manage your conditions and are otherwise in good health. If you smoke, you should quit to further reduce premiums
  • Consider no-medical life insurance. If you cannot get a standard policy, consider applying for no-medical or guaranteed life insurance. These policies don’t require a medical exam, so you can get coverage even if you are in poor health. 
  • Buy young. The best way to get coverage with a pre-existing condition is to buy a policy when young. Pre-existing conditions are not as significant for young people, so you are more likely to get coverage. 
  • Ask for a reevaluation. If you currently have a policy, you can request a new medical exam to demonstrate improvement. A reevaluation could secure you a lower premium rate. 
  • Work with an insurance broker. A qualified insurance agent can help you find policies that will accommodate your pre-existing condition for a reasonable rate. Working with an agent can reduce the number of application denials you receive. 

What Happens If I Am Denied Life Insurance Coverage?

A life insurance application rejection will be a negative mark on future applications. Insurance companies consider denials to be an indicator of risk, so each individual denial will make it harder to get coverage. 

As such, it is crucial that you research policies and take steps to maximize your chances of getting approval. If you look at the right type of insurance policy and are honest about your health conditions, your approval odds will be higher. 

If you cannot find approval or cannot find a policy with acceptable premiums, don’t panic—you still have options. One potential solution is to invest the money you would have spent on monthly premiums. A well-managed investment account can provide a significant nest egg for dependents if you pass away. 

Life Insurance and Pre-Existing Conditions FAQ

Below are some of the most common questions we receive about getting life insurance with pre-existing conditions. 

Yes, insurance companies can deny coverage due to pre-existing conditions that significantly increase mortality risks. You are more likely to face rejection if you apply for a term or permanent policy with a pre-existing condition as these policies have higher health standards.

Yes, insurance companies consider mental illness a pre-existing condition just like physical illness. Health questionnaires on life insurance applications will ask about what type of mental issues you have and when you received a diagnosis. 

If you have a history of mental illness or self-harming behaviour, insurers might reject your application. Common mental illnesses that could affect coverage include:

  • Anxiety
  • Bipolar disorder (BPD)
  • ADHD
  • Depression
  • Disassociative disorders
  • Eating disorders (e.g., anorexia or bulimia)
  • Obsessive-compulsive disorder (OCD)
  • Post-traumatic stress disorder (PTSD)
  • Schizophrenia
  • Schizoaffective disorder

Insurance applications will have a section with questions about your mental health. Just as with physical pre-existing conditions, lying about mental illnesses on a life insurance application can be grounds for denying a death benefit claim.

Yes, obesity counts as a pre-existing condition for life insurance purposes. Obese people are at a higher risk for heart disease and various forms of cancer, so they are riskier to insure. You can lower your insurance premiums if you lose weight to a healthy range.

If you are a recovering alcoholic, you can qualify for standard life insurance coverage if you demonstrate you have been sober for at least two years. However, your premiums will probably be higher than someone who is not a recovering alcoholic.

The rate penalty for a pre-existing condition depends on the severity of the condition and how well you manage it. If you have a minor pre-existing condition and take proactive steps to monitor and manage it, you might only face a small penalty on premiums. If you have severe symptoms and are in poor health, you could see a significant spike in premiums.

Yes, you should disclose all pre-existing conditions you are aware of. If you lie on an application, the company could cancel your policy or deny benefits, and your premium payments would go to waste.

You will have to fill out a health questionnaire and take a medical exam when you apply for life insurance. During the medical exam, the physician will record your height, weight, heart rate, and blood pressure. They will also test your blood and urine to identify markers for conditions or illnesses. They will often request your medical records from your physician.

No, insurance companies cannot cancel a life insurance policy if you get sick, provided you told the truth on your life insurance application about any pre-existing conditions. If you are honest and pay your premiums, the insurance provider will not cancel your life insurance policy.

Employers provide a nominal amount of life insurance coverage for employees through group life insurance policies. Most group policies don’t take employee health into consideration because employers renew policies annually. So having a pre-existing condition will not matter for group life insurance.

It depends on the kind of condition and how severe it is. If it is a mild condition and you can proactively manage it, standard insurance like a term or permanent policy is the best option. If your pre-existing condition is severe, you might not qualify for a term or permanent life insurance policy. In that case, your best option is either simplified or guaranteed life insurance. 

Guaranteed life insurance policies have higher premiums and lower coverage limits than other types of policies, but you can get a guaranteed policy regardless of your health. If you have no options for standard life insurance, a guaranteed policy can give you the coverage you need. 

However, you could possibly end up paying more into the policy than the benefit is worth. For example, if you buy a $10,000 policy at 65 for $1,200 a year, you will have spent more on premiums than the value of the death benefit in ten years.

Many life insurance policies have a contestability clause in place for the first two to three years of coverage. If you pass away while the clause is still active, the insurance company can investigate your death to see if you misrepresented your health or supplied false medical information on your insurance application. If you lie and they find out, they can deny the death benefit payment.

Everyone Needs Life Insurance

Even without pre-existing conditions, every Canadian needs Life Insurance.

Compare Life Insurance Policies for Pre-Existing Conditions

Searching for life insurance with pre-existing conditions doesn’t have to be stressful when you work with us. Our team at Alliance Income will help you find and compare life insurance rates from the top providers in the nation. Our licensed agents can answer any questions you have about shopping for insurance. Fill out a form to receive an instant quote!

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