Health Conditions That Affect Insurance Rates or Approvals
Alcoholism, cancer, heart problems, high cholesterol and diabetes are some of the health conditions that are either uninsurable or at least make getting good life insurance rates difficult.
As anyone with a serious health condition may know from shopping for life insurance, finding coverage at reasonable rates, if at all, is difficult. Poor health equates to a bigger risk for insurance companies, which pass the cost on to customers with deadly diseases.
Some insurers specialize in certain areas, offering coverage that other companies don’t. Tony Steuer, an insurance literacy expert, says he once had a client with a heart condition history who was declined by one company, but offered a preferred rate by another.
Many things factor into being approved besides medical conditions, says Mike Kilbourn, a financial planner in Naples, Fla. Age, amount and type of insurance being sought, and demand for certain insurance products are part of the equation, Kilbourn says. Approval and price also depends on the severity of the disease, and if you have it under control, Steuer says.
“Never assume that a certain health condition precludes you from qualifying for insurance,” Kilbourn says. “Until a person reaches 90, your age will no necessarily stop you from qualifying.”
Some health conditions can affect how a potential customer is rated, which affects the premium charged, Kilbourn says. The health ratings range from “select preferred” to “uninsurable” to “decline,” he says. There are approximately 16 ratings between select preferred and decline.
Because companies can differ in how much they charge for certain health conditions, it’s a good idea to shop around and find an insurance agent who can talk to a number of companies.
Here are some health conditions that can be difficult to get life insurance for:
Diabetes. Diabetics taking their insulin may pay an extra premium, Steuer says, but other personal health factors may be just as important. Ratings depend upon age at onset and the duration of a disease, according to a book Steuer wrote. Sometimes an offer to a standard rate can be obtained if the disease is well controlled for at least a year and current blood sugar is within normal limits. Neurological, kidney or vision problems will add to any rating, as will having coronary artery disease.
Derek Helm, who works in marketing for a dentistry business in Beverly Hills, Calif., has diabetes and was offered term policies from two life insurance companies that would share the coverage. Helm was originally denied coverage by one company, and he decided he didn’t want the policy because he was looking for a whole life policy.
Alcohol. Used socially, it’s not a problem. But a recovering alcoholic would have the premium rated for the first few years, becoming more favorable over time until eventually a possibly referred rate, according to Steuer.
Breast cancer. Tumor size, invasiveness and stage determine the rate offer, according to Steuer. Most breast cancers carry a postponement of one to five years, depending on the factors listed above. Afterward a flat extra is added along with a possible table rating for more severe cancers. Depending on the type and severity of the cancer, the flat extra/rating can be lifted after 5–10 disease-free years.
Cancer. Many cancers can be a standard rate after five to seven years from the date of the last treatment. Prior to that, expect flat extra ratings of $5 to $15 per $1,000 in coverage, Steuer says.
Cholesterol. Carriers usually put the most emphasis on HDL ratio, but they also factor in total cholesterol, according to Steuer. If both of these are within normal limits the carrier will offer their best rates if all other criteria are met. As both of these numbers increase, the offer will be closer to standard. Most carriers will apply table ratings to total cholesterol that exceeds 300 and a ratio that exceeds 10.
Coronary artery disease. Factors used to set rates include age, smoking status, cholesterol, left ventricle function and ejection fraction (both of which can be found on the stress test), whether or not you had a heart attack, if an angioplasty or bypass graft(s) was done, and any information from your physician regarding current cardiac condition. Good cases are generally in the table 2–4 range. Best cases can be standard rate after 10 years.
Hypertension high blood pressure. Well-controlled hypertension can expect a possible preferred rating with some of the carriers, according to Steuer. Uncontrolled hypertension will require several table ratings added to a standard rate, depending on the blood pressure readings.
Irregular heart beat. Approval depends on the severity of the arrhythmia, what treatment has been utilized, if another cardiac condition is present, and how many episodes client has had, Steuer says. Many underwriters will issue credits for a recent, well done stress and/or echo or a cardiac catheterization, which is normal. A history of heart attack, angioplasty, or bypass surgery combined with an arrhythmia usually results in a decline from the carrier. Simple arrhythmias can be standard rate. Others are usually a low table rating and up depending on the findings of the cardiac work-up and period of stability.
Multiple sclerosis. Assuming diagnosis has been made, a policy is typically postponed within the first year of diagnosis, Steuer says. At age 35 and older at onset, where the disease is slowly progressive with infrequent episodes, a mid-table rating is given. More progressive disease with frequent episodes (more than two per year) results in a high table rating. Rapidly progressive disease is declined.
Parkinson’s Disease. People who have later onset disease without the problems of depression or dementia can usually be offered policies at very mild ratings, such as low table ratings, Steuer says. Those with the disease that’s more severe than mild will be in the mid-table ratings.
About the only good news about all of this is that for life insurance policyholders who already have a policy in place, they don’t have to alert their insurer if they get a disease after they have a policy.
“The only change that can be made is if it’s a change that can be made in your favor,” Steuer says.
If you are denied for a life insurance policy, the insurer must tell you why, and you can contest, it, he says.
Aaron Crowe is a freelance journalist who specializes in covering personal finance and insurance topics.
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