Having pre-existing conditions doesn’t necessarily mean that you can’t get traditional life insurance. Much depends on your specific pre-existing condition. Having a pre-existing health condition may also mean that your insurance premium is higher.
However, if you can’t get life insurance due to your pre-existing condition, you can qualify for no medical exam life insurance. The downside is that your death benefit will be limited, and you’ll pay more.
Can I get life insurance if I have pre-existing conditions?
Pre-existing conditions are health problems that exist before you apply for coverage. Common pre-existing conditions include asthma, diabetes, and cancer, according to HealthCare.gov.
Each life insurance company evaluates pre-existing conditions based on risk. So asthma will 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 will be eligible for traditional life insurance.
Mark Williams, CEO of Brokers International, told Insider that people with pre-existing medical conditions should use independent agents while shopping for life insurance because companies underwrite differently and agents would know which ones are more flexible and liberal.
He suggested looking into Brighthouse, Principal, and Guardian. You may still pay more and you will need to send your medical records with your application.
Life insurance premiums are based on your health risk
The underwriting process is how the insurance company determines your insurability — how much of a risk you are and how much to lend you. During the underwriting process, the insurance company collects information about your health (medical history), 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 disease is discovered during the exam process, it may make it more difficult to get coverage. That is why geneticists suggest getting private life insurance coverage before genetic testing, because the results may disqualify you for life insurance in the future.
Based on your medical exam, you are assigned a risk assessment category. Once your risk is assessed, your premiums are calculated based on your risk and you are issued a policy.
Here’s an overview of the different risk classifications used by insurance companies:
Risk Classification | Definition |
Preferred Plus/Elite | Excellent health without any big risk factors for coverage will most likely end up rated at Preferred Plus, giving them the lowest possible premium payment. |
Preferred | Excellent health but may have some subtle red flags, but will enjoy low premiums. |
Standard Plus | Above-average health, but some things may be outside the ideal range. You will have low premiums just not as low as Preferred or Preferred Plus. |
Standard | Normal risk and insurable at standard rates. |
Substandard | Impaired risk deemed undesirable due to medical condition or hazardous occupation requiring a higher premium charge. |
Smoker | Higher risk because nicotine negatively affects health and impacts life expectancy. Will pay more than non-smokers. Some companies separate cannabis users from tobacco users. |
Data sourced from NAIC and Quotacy
No medical exam life insurance is an option
If your pre-existing health condition makes you ineligible for traditional life insurance, no medical exam life insurance is an option.
Not knowing your medical history means the insurance company is taking a gamble on your health. The benefit of no medical exam life insurance is that acceptance is typically guaranteed. The drawbacks are limited coverage amounts — usually up to $100,000 — and there may be a waiting period for death benefits to payout.
There are two types of no medical exam life insurance: guaranteed issue and simplified issue.
Guaranteed issue life insurance
Guaranteed issue life insurance has no medical exam or medical questions. It is sometimes referred to as “final expense” insurance because the coverage amounts are so low that they basically only cover funeral and burial expenses.
Some guaranteed issue life insurance policies have a two-year waiting period, meaning 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. Understand that there are limits on coverage amounts and it varies by insurance provider.
Simplified issue life insurance
Simplified issue life insurance doesn’t have any age restrictions or a medical exam, but there is usually a health questionnaire. It will not be as extensive as traditional life insurance. Also, death benefit amounts are higher than with guaranteed issue life insurance.
If you fail to disclose a condition and die, the insurance company can withhold death benefits to your beneficiaries. According to ColonialPenn, some simplified issue no medical exam life insurance policies have a two-year waiting period, meaning that if the policyholder dies within the first two years of having coverage, the policy won’t pay out.
Final Expense | Guaranteed Issue | Simplified Issue |
A type of guaranteed issue policy with a low death benefit that covers funeral and burial expenses | No medical exam and for those 50 years old and older. Coverage up to $25,000 | No medical exam with no age limit, but you still have to complete a health questionnaire. Coverage up to $100,000 |
Alternatives if you are denied coverage based on the medical exam
If you are denied life insurance coverage for health reasons, consider these alternatives:
1. Group life insurance: A term life policy offered by employers to employees. That means that all employees are accepted. One disadvantage of employer-provided group life insurance is that if you leave your job (resign, retire, or are terminated), you lose your coverage.
2. No medical exam life insurance: A policy with a low death benefit and sometimes a two-year waiting period before paying out to beneficiaries. Check the guaranteed and simplified issue no medical exam policy mailers that might arrive in your mailbox from AARP, Colonial Penn, or Mutual of Omaha.
3. Annual renewable term life insurance: Short-term coverage. A one-year policy is cheap compared to a traditional term life policy. It is renewed at the end of each year, and your premium usually increases as you age. Although your premium may increase each year based on your age, you will not have to have a medical exam every time you renew, according to Fidelity Life.
4. Final expense insurance: A type of guaranteed issue policy that can be term or whole life, with a low death benefit that covers funeral and burial expenses.
5. Find life insurance companies that specialize in “high risk” applicants. This will require some work and research because “high-risk” can mean you are a smoker, felon, or have health issues.