Did you know that being diagnosed with a lung condition does not disqualify you from life insurance?
You can still get the insurance coverage you need to protect your family. However, the types of policies available to you and your premium rates will depend on your diagnosis, treatment, and general health.
Let's dive into this in more detail.
What Do Life Insurance Companies Consider As Lung Conditions?
Lung conditions are infections or disorders that impact the lungs and cause breathing problems.
Broadly speaking, lung conditions are one of three types:
- Airway diseases: These diseases block the airways or cause them to become narrower. Examples include chronic obstructive pulmonary disease (COPD), asthma, bronchiectasis, and bronchitis.
- Lung tissue diseases: These cause lung scarring, making breathing difficult. Examples include sarcoidosis and pulmonary fibrosis.
- Lung circulation diseases: These affect the blood vessels in the lungs and reduce the ability of the lungs to inhale and exhale.
Each insurance company has its own policy regarding which lung conditions it will cover and which not. Generally, insurers offer coverage for the following lung conditions:
- Lung cancer
How Do Lung Conditions Affect Your Life Insurance?
Before we look at how lung conditions impact your insurance cost, it is important to understand how companies set premium rates.
When you apply for life insurance, you will have to go through a process called underwriting. It helps life insurance companies to evaluate your risk profile and determine your life expectancy. Based on the information, they decide whether to write you a policy or not and, if you are eligible, the amount of premium to charge you.
Basically, as part of the underwriting process, insurance companies assign a health classification to all the approved applicants. The better your health is, the higher the health rating and lower your monthly premiums will be.
Each large insurance company has a slightly different underwriting process. All the same, most providers have the five health classifications:
- Preferred Plus – This is the best rating you can get. It is assigned to applicants who are in good shape and have no family history of death from cancer or heart disease. Life insurance providers reserve their best rates for preferred plus applicants.
- Preferred – This rating has the second-lowest premiums. To qualify, your BMI should not be more than 30 or 31 and you should not have more than one or two minor health conditions.
- Standard Plus – This rating comes with the third-lowest premiums and is generally offered to applicants who are reasonably healthy and have a BMI of not more than 32 or 33. People with well-controlled mild to moderate health issues can also qualify for the standard plus rating.
- Standard – This rating is offered to people who have a BMI of 38 or less and who do not have a severe health condition. They may also have well-controlled moderate health conditions, mental health conditions, or chronic health conditions.
- Table ratings – Applicants who have a high BMI and/or serious health conditions receive table ratings (such as table 2 rating, table 3 rating, etc). The lower the table rating, the better your premium rate will be. This means someone a table 1 rating will pay significantly less for coverage than a person with a table 10 rating.
How your lung condition will impact your insurability and premium rates depends on many factors, such as:
- Its severity
- What kind of treatment you are taking
- How well you are responding to the prescribed treatment
- How long you have had the lung condition
- Your overall health
People with a sever lung condition are more risky to insure and hence will need to pay more for coverage.
Here is a general overview of how different lung conditions may impact your premium rates.
Someone with mild asthma or exercise-induced asthma may still qualify for preferred rates. But if you take a bronchodilator daily, standard rating is probably the best you can get. If you have severe asthma and frequently require supplemental oxygen, you will pay higher premiums.
Chronic Obstructive Pulmonary Disease (COPD)
Standard rates are available to those with minor conditions who have never been prescribed supplemental oxygen therapy. If you have moderate symptoms and take a beta-agonist drug daily, you may receive a table rating.
COPD patients who smoke will not qualify for a medically-underwritten life insurance policy.
People with bronchiectasis can qualify for up to standard rates, provided they are not on supplemental oxygen therapy. Bronchiectasis patients who require supplemental oxygen will likely get a table rating, meaning they will pay more than someone who doesn’t have this condition.
If you are diagnosed with lung cancer and are currently undergoing treatment, you will likely be not able to get a standard life insurance policy. That said, a lung cancer diagnosis is not an unsurpassable obstacle to getting life insurance. You can still qualify for certain types of coverage, like guaranteed issue or graded benefit life insurance. While these policies are more expensive than standard plans and have lower death benefits, some coverage is better than none.
If you are in remission, you can qualify for term or whole life insurance after a certain period. The waiting period for life insurance after lung cancer may vary from one insurance provider to another. Some insurers will offer you coverage after you have been in remission for 5 years, while others may hold back their approval until you have hit the 10-year mark.
How to Find the Best Life Insurance with a Lung Condition?
If you have a mild to moderate lung condition and don’t smoke, you can qualify for two of the most common types of life insurance — term life and whole life. Which one is right for you will depend on your financial goals.
Term life insurance is a type of life insurance that lasts for a specific period, like 10, 20, or 30 years. It is simple to understand and significantly more affordable than whole life insurance.
Term life insurance is a good fit for people who want provide their loved ones with a safety net for a certain number of years, e.g. until they achieve financial independence or until their children finish college.
Whole life insurance combines the death benefit with an investment element. These policies provide coverage for as long as you live and accumulate cash value on a tax-deferred basis. Consider a whole life plan if you want to diversify your investment portfolio or have a dependent who needs lifelong care.
What If I Get Denied?
If your application for life insurance has been declined, that means the insurer you applied with rated you as too risky to insure. However, that doesn’t mean you cannot get the desired coverage elsewhere.
Each insurance company has its own underwriting guidelines, so it is possible that other providers may be more accommodating. Even if they are not, you can always go for no-medical life insurance.
Simplified issue and guaranteed issue are two types of no-medical life insurance plans designed specifically for people with health concerns. You can buy either to cover some of your financial obligations, but remember that these policies offer lower death benefit payouts at a higher price point.
Simplified Issue Life Insurance
Simplified issue plans let you bypass the life insurance medical exam. The insurer decides your eligibility on the basis of your answers to the health questionnaire alone.
Unless your lung condition is extremely severe, you should have no trouble getting approved for a simplified issue policy. But keep in mind that these policies usually have small death benefit payouts — up to $50,000.
Additionally, some simplified issue policies have a 2-year waiting period on non-accidental death. If you die from a natural cause during this period, the insurer will not issue the death benefit to your beneficiary. Instead, it will return them the premium amount you had paid.
Guaranteed Issue Life Insurance
Guaranteed issue involves neither a medical exam nor a health questionnaire, so you can get approved despite poor health. The approval is almost guaranteed, provided you are within a certain age bracket. The downside? All guaranteed issue plans come with a waiting period and the payout is small — usually only up to $25,000.
Getting life insurance with a lung condition is very much possible. Your premium rates and the policy types available depend on the severity of your condition, age, and overall health. With a mild lung condition, you may well receive standard premium rates.
However, if you require supplemental oxygen, you will likely get approved with a sub-standard rating. People who have a severe lung condition and smoke will most probably not qualify for a standard policy.
When you apply for coverage, the life insurer will assign you a health rating, based on your risk profile. All insurance carriers underwrite a little differently, meaning one insurance company may well offer you a better health rating and lower rate than another.
Dundas Life will shop your case to multiple A-rated life insurance companies so that you can get the right coverage at a great price. We will also walk you through the process of purchasing life insurance and answer any question you may have.
Frequently Asked Questions
How much will I pay for life insurance if I have a lung condition?
Since life insurance rates are based on many personal factors, there is no one-size-fits-all answer to this question. Your cost depends on things such as:
- The type of lung condition you have and its severity
- How frequently you require supplemental oxygen
- Your age and overall health profile
- The type of life insurance and the amount of coverage you want
Generally speaking, mild lung conditions are less likely to affect your premiums. But a condition that requires supplemental oxygen, like emphysema, may have a significant impact on your overall cost. Regardless of the type and severity of the lung condition, you will receive the best rates from fully-underwritten life insurance plans.
If you want to skip the medical exam or have been denied standard life insurance before, consider a simplified issue or guaranteed issue policy. Although more expensive, these policies are easier to qualify.
What Qualifies as a Lung Condition?
Any disease that affects the lungs and ability to breathe properly qualifies as a lung condition. Most common lung conditions are asthma, bronchitis, COPD, and lung cancer. Generally, people with mild to moderate asthma, bronchitis, and COPD can get standard life insurance, provided they don’t smoke.
If you have a very severe lung condition, are currently undergoing treatment for lung cancer, or have a severe lung condition and smoke, your options would likely to be limited to guaranteed issue life insurance or graded benefits life insurance. Lung cancer survivors who have been in remission for 5 years or more may qualify for term or whole life insurance.
Can I get life insurance with chronic bronchitis?
You can still get life insurance with chronic bronchitis. The types of life insurance policies available to you and your premiums depend on the severity of your condition, the treatment you are taking, and your overall health. If you have severe chronic bronchitis and take supplemental oxygen therapy on a regular basis, you may not be eligible for a fully-underwritten policy. In that case, a no-medical policy is your only option.