Visit any personal finance site and chances are you will find an article on how buying life insurance for young people can save you money (we even have this article). So you’ve finally decided to listen and take out life insurance BUT the next biggest question is: can I even to qualify based on my health?
For those who have never been sick with anything other than the flu, chances are, yes, you won’t have any problems with life insurance. Congratulations! However, this question is not easy to answer for those with more health problems.
How Your Health Affects Your Life Insurance Rates
Your health and insurance premiums go hand in hand. The truth is the healthier you think you are, the better you can expect from premiums…
Since death is the only thing guaranteed in life, insurance companies must weigh the risk of your death during the life of their policy. If you die while insured, the company will have to pay death benefit to your dependents, which can be quite costly.
But if they play their cards right, your insurer can make good money for you. If you don’t die during the term of your term life insurance, they won’t have to pay.
How long has your health history been important?
Insurance companies take your overall medical history into account when deciding whether to approve your application and the premiums you will pay.
You don’t have to worry about remembering the exact date when you got chickenpox as a child, but what you must be prepared to constantly discuss any medical problems that still affect your life. This also includes any recent diagnoses you have. recovered from.
Some of the more common indicators of your health include:
- Pre-existing conditions. There is no one-size-fits-all list of “pre-existing conditions,” but they usually include all the medical diagnoses you received from a professional before applying for insurance – whether the diagnosis is mild or serious in your life. These can include asthma, diabetes, depression, high blood pressure, and epilepsy.
- Smoking. Smokers and other tobacco users can pay four times as much as non-smokers for a similar policy (all other things being equal). Even if you are in excellent health, insurers are thinking about future health problems as a result of tobacco use.
- Weight and BMI. Most insurance companies estimate weight using Body Mass Index, or BMI, which measures your height to weight ratio. Weight below or above the recommended range on the BMI chart usually means higher premiums.
- Family history. Insurers want to know about any diseases in your biological family that may be hereditary, such as heart disease and most forms of cancer. They will only ask about immediate family members – biological parents, siblings, and possibly grandparents – so don’t worry about unraveling the entire family tree.
- Drinking. Drinking alcohol can raise your insurance premiums, lower your rating to a lower level, or take away your insurance. Also drunk driving huge red flag for insurers.
- Drug use. Any prescription drugs that are potentially addictive – some pain relievers, opiate substitutes like methadone, etc. – can raise your rates or even lead to rejection. If you have been treated for drug addiction, your insurers will want to know the details, including duration and frequency of use, hospitalizations, rehabilitation periods, and relapses.
How will my health be measured?
After you apply for life insurance, the provider – using proven algorithms, human intuition, or both – evaluates your application and categorizes you as a risk class.
This classification, based in part on your health, determines how much you will pay in premiums, and in some cases it affects the amount you can claim for death benefit.
Here are the ratings that most providers are using.
- Preferred Plus… The rating is generally for non-smokers with excellent health and no major medical problems. Typically, priority plus candidates pay the lowest rates.
- Preferred… This rating is often given to those with only a few minor (and well-controlled) medical conditions or body mass index (BMI), which is on the higher side – assuming you are otherwise healthy enough.
- Standard Plus… A more serious chronic illness or a red flag in your family’s health history puts you down to the standard plus level. Smokers who are otherwise in excellent health may be eligible for a Standard or Standard Plus rating, depending on the provider.
- Standard… If your health is okay but not okay – if you are treating multiple conditions, you have a very high BMI and / or you have a complex family history of illness – you may qualify for standard ratings that offer higher premiums.
- Tabular rating (aka “poor quality”). Sometimes referred to as “substandard,” these ratings are for the highest-risk candidates (eg, cancer survivors, smokers with lung problems, or skydiving firefighters). A tabular ranking does not necessarily invalidate your coverage, but it does mean that you will pay a lot more if you qualify.
Here is a sample monthly rates for nonsmokers on a 20-year $ 500,000 life insurance policy:
| Rating | female | Man |
|---|---|---|
| Preferred Plus | US $ 19.80 | $ 23.75 |
| Preferred | US $ 24.40 | US $ 29.02 |
| Standard Plus | US $ 33.50 | US $ 40.13 |
| Standard | US $ 37.21 | US $ 45.56 |
| Table Rating 1 | $ 44.92 | USD 55.11 |
| Table Rating 2 | $ 52.47 | $ 64.61 |
| Table Rating 3 | US $ 60.08 | $ 74.17 |
A source: Political genius
Will my life insurance be denied just because I have a medical condition?
Most providers will not deny coverage to you based solely on the fact that you have a medical condition. When reviewing your application, the underwriter may consider the following factors affecting your health:
- How serious are your diagnoses?
- When you were diagnosed.
- The history of your recipes.
- How long have you been treated.
- Has your condition improved over time?
- Whether you have been hospitalized or not.
- If your current diagnosis or lifestyle may lead to other illnesses in the future.
Can Certain Health Conditions Make You Eligible For Life Insurance?
With so many life insurance options available, just about anyone can find some kind of coverage. But an affordable plan with a decent death benefit is another matter entirely.
If you have had any of the following health conditions in the past 10 years, you may not be able to qualify for traditional terminology politics:
- Heart attack.
- Cancer.
- Diagnosed alcoholism or drug addiction.
- Kidney disease.
- HIV or AIDS (for some insurers).
Even so, healthy habits can work for you. If you can prove that you are monitoring your health, seeing your doctor, and taking all the medications you need, some health care providers will work with you.
It is also worth considering the “guaranteed release” policy, which offers a limited death benefit.
How do insurance companies know about your health?
Initial questionnaire
With many providers, you answer a few questions about your medical history online before you even get a quote. The quote is not a guarantee or a final price, it is just an idea of how much you might pay if you bought the policy there.
Be as honest as possible about your health information, even if the truth increases your premium price. Insurers can cancel your policy, including death benefits, if they discover that you’ve covered up your health condition or lied about important statistics.
Prescription drug databases
Every time a doctor prescribes a medicine for you to treat a medical condition, that prescription is recorded. Insurers can easily cross-check these records; this is one of the first things they check when they view your application.
Medical records
With your permission, insurers can look at the records of any doctors or hospitals that treated you. Typically, they will check the condition and / or hospitalization that you have already reported and will find out about what you did not do.
If you already have medical conditions, you will want to provide evidence that you are moving forward with appropriate treatment or treatment, such as regular doctor appointments and medication. Insurers consider you less of a risk if your illnesses are under control.
Medical checkup
The exam is the final step before becoming eligible for a policy. This is not much different from the annual physical examination at the doctor’s office – the healthcare professional checks height and weight, blood pressure, cholesterol levels, and other statistics.
They will also take a blood and urine sample to test for drugs, alcohol, tobacco, blood sugar, etc.
Sometimes, during the examination, information appears that surprises you (if you have not gone to the doctor for a while, you may not notice changes in your cholesterol or heart rate).
New bursts on your health radar may not disqualify you, but they can slightly boost your stats.
What about the exams waiver rules?
Many life insurance companies offer policies that do not require a medical examination, and this option has its advantages – for example, policies are issued much faster.
More details: What tests are required for life insurance?
But don’t be fooled into thinking that a no-exam policy is a shortcut to hide your health condition. Insurers yet some basic medical information is required and they yet check the recipe databases.
There are “guaranteed release” policies that accept every applicant, but these are usually for older candidates with poor health and they have much lower death benefits.
There is another reason to think twice about the rules for not taking exams: since you provide less data to the insurer, they have to take more risk, so they will often charge you higher premiums than if you had chosen the exam.
Summary
Choosing a healthy lifestyle can make your life insurance more affordable. But the judicious management of chronic illness or the pursuit of long-term recovery can also go a long way.
And with an expiration date, you have a chance to improve some health factors by the time it expires and get a better price if you decide to renew.