Life Insurance with Pre-existing Health Conditions

Getting life insurance with pre-existing health conditions can be difficult, however, it is certainly not impossible. Find out more.

July 5, 2021
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5
min read

Having pre-existing health conditions does not necessarily mean you cannot get traditional life insurance coverage at an affordable rate. Depending on your condition and its severity, you may still qualify for competitive rates. Even if your condition is severe enough to cause a denial or prohibitively high premiums, other options are still available. Read on to find out more about life insurance and pre-existing health conditions.

Can I qualify for life insurance if I have pre-existing health conditions or medical problems?

Question marks around stethoscope

More than one in five Canadian adults is living with some form of chronic health condition. These medical conditions range from heart disease, to diabetes, to asthma. Can you qualify for life insurance with a pre-existing health condition?

The answer for most people is: Yes. You may be able to buy life insurance with these and other medical conditions, including HIV infection.

Life insurers rely on a medical exam and health questionnaire to understand your current health and wellbeing. If you disclose a pre-existing condition, the insurer may ask you additional medical questions. They may also peruse your medical records more closely. All the same, the chances of getting coverage are high since only 4% of applications are rejected. However, in all likelihood, you will pay a higher premium than someone of the same age and gender without any medical condition.

Each life insurance company evaluates applicants with pre-existing conditions differently. A licensed broker like Dundas Life can help you collect quotes from all leading life insurers in Canada. This, in turn, will make it easier for you to find out which insurance carrier is best for you.

Options for those with pre-existing conditions

Guaranteed life insurance

Guaranteed life insurance is a great option for people with pre-existing conditions. Insurance companies in Canada offer guaranteed issue plans to people who do not qualify for traditional life insurance.

Guaranteed life insurance does not involve a medical exam or a health questionnaire. Plus, the approval is guaranteed — hence the name. However, maximum coverage amounts are lower and premiums much higher than standard plans.

Permanent life insurance

Permanent life insurance, provides coverage until you die. Upon your death, the insurer releases the payout to your beneficiary. Many permanent life insurance plans also include a savings component. Generally speaking, only people with minor illnesses may qualify, like high cholesterol. If you get approval, you are likely to get a rated policy - which basically means your premiums will be on the higher side.

Term life insurance

With term life insurance, you are protected for a certain number of years. Your beneficiary receives the death benefit amount if you die within the term. If you survive this period, you will not receive anything. Compared to permanent life policy, a term life policy is considerably cheaper.

You may qualify for term life if your pre-existing condition is not severe. If approved, you will likely receive rated premiums.

Simplified (or no-medical life insurance)

Traditional life insurance policies involve a medical exam. Term life and permanent life insurance fall under this category. But what if you do not want to take a physical exam due to poor health? Simplified life insurance can be a good option for you then. You will not have to undergo a medical exam to qualify, although you will need to answer a health questionnaire. Coverage levels are higher than guaranteed life insurance and premiums are lower.

Types of pre-existing conditions

Doctor explaining to a patient

Whether you are approved for life insurance or not depends on the type of pre-existing medical condition you have and its severity. Examples of health conditions that may increase your premium or lead to a denial include:

Diabetes

For people with diabetes, a number of factors can come into play when they shop around for life insurance. Your best chance of obtaining life insurance coverage at a reasonable cost is when you:

  • are on oral diabetes medications and your diabetes is well controlled
  • have a healthy weight
  • do not have any diabetes-related complications, such as kidney disease.

Diabetics who are dependent on insulin may also qualify for life insurance. If you are on insulin, you are more likely to qualify if your condition is under control and you do not have a serious diabetes-related complication. Although, you may receive a higher rate than someone taking oral diabetes medications.

High blood pressure    

A high blood pressure diagnosis may make life insurance more costly. However, you can qualify for affordable rates if your blood pressure is moderately high or if your condition is well treated. Each insurer underwrites high blood pressure differently.  You will likely receive higher rates if your blood pressure reading is 140/90 or higher. A severely high reading, on the other hand, may disqualify you for life insurance altogether.

Cancer

Is life insurance for pre-existing cancer patients a possibility?

If you were recently diagnosed with cancer or are undergoing treatment, you will likely be denied a traditional life insurance policy. Simplified issue and guaranteed issue life insurance may be your only options in such a scenario.

However, if you have been in remission for two years or more, you may be able to get coverage, albeit at a considerably higher rate.  

Stroke

Getting traditional life insurance after a stroke may become difficult. A stroke is a severe medical event and increases your chances of experiencing more issues afterward, so insurers tend to be careful. All the same, you may qualify for a traditional life policy if it has been more than two years and you have recovered well. Your chances of getting approval improve if you are a non-smoker and have blood pressure and cholesterol in control. If you have had a stroke, the insurer will likely ask you some additional questions such as:

  • Did you suffer a minor or full stroke?
  • What was the date of your stroke?
  • What medications are you taking?
  • Did your stroke result in any lasting neurological defects?
  • Do you have any health conditions that can make you more susceptible to a second stroke such as diabetes or high blood pressure?

HIV/AIDS

Getting life insurance coverage as a person living with HIV is difficult but not impossible.

Life insurers in Canada treat an HIV/AIDS diagnosis as a severe health condition. As a result, most providers do not offer a term or whole life policy to those who have tested positive for HIV. However, some insurance companies like Manulife accept applications from people living with HIV. Approval, however, may depend on factors like when you were diagnosed and whether your condition is well-managed. But all is not lost even if you do not qualify for traditional life insurance. You can still get no medical life insurance.

Transplant

Life insurance after an organ transplant is possible but getting coverage might not be as straightforward as many think. Insurers consider many factors before deciding who qualifies and who does not. Life insurance companies will peruse your medical records and ask a series of questions to determine if they can offer you coverage. You may also need to undergo a medical test.

Your chances of getting accepted may improve if your transplant went well. The same holds true if you have a low risk of developing further complications. If your application is not successful, you can still apply for no-medical exam life insurance.

Do you need to tell the life insurance company you have a pre-existing condition?

People exchanging a document

The simple answer is: Yes. You should always be truthful about your health when you buy life insurance. If you die and the insurer finds out you lied or withheld information, it may reduce the death benefit or deny the claim altogether.

Let’s say you have a health condition that you know will bump up your insurance rate, so you choose not to disclose it. The condition does not show up in the medical test either. As a result, you are able to qualify for standard rates. However, you pass away suddenly after taking the policy out. The insurer decides to investigate the claim carefully and a closer inspection reveals you were not truthful in your application. The insurer can refuse to issue the payout, even if you did not die because of the undisclosed health condition.

The bottom-line: It is much better to disclose an underlying health condition and pay a slightly higher premium for a policy that will guarantee to pay out, than pay a slightly lower premium for one that will not.

Why do insurance companies care if you have a pre-existing medical condition?

Life insurers make money by selling a product for more than it costs to provide. That is why they do not like early deaths because that would mean paying out before they could collect many premiums.

To make a profit, an insurer must be able to assess your risk accurately and charge a rate appropriate for your health classification. If the insurer thinks you have a higher risk of premature death, it will quote you a higher premium to offset the additional risk.

A pre-existing medical condition, like diabetes, can increase your risk of early death. Insurers care if you have an existing illness because this knowledge helps them decide whether they should offer you coverage and what premium rate they should charge you.

Tips for buying life insurance with a pre-existing condition

Take into consideration when to apply. Your chances of getting rejected are high if you apply immediately after a heart attack. However, you can reapply if your treatment is working out well and you are doing all that is in your control to manage your condition.

Ask for a re-evaluation if your health improves. If you get coverage but receive a higher premium rate, you can request a new medical test once you are able to bring your condition under control.

Focus on those things that you can control. Take very good care of yourself since the insurer will take note of this while setting your rate. That means visiting your doctor, taking your medication, and maintaining a healthy weight.

Work with the right insurance broker. Some insurers are more lenient for specific medical conditions. An independent broker like Dundas Life can help you find the company that is best for your situation and reduce your cost significantly.

What to do if you have been denied life insurance with pre-existing conditions

A severe pre-existing condition can make you uninsurable. Even so, do not lose hope.

You can invest the money you would have paid for coverage in something else. If you wanted to take out an insurance policy to cover end-of-life expenses, this strategy can help you set aside money for that purpose. Also, you may consider reapplying should your condition improve.

Conclusion

With a pre-existing condition, getting life insurance can be difficult but not impossible. Speak to an independent broker like Dundas Life to understand your odds of getting approved. We will also work with you to help you find the insurer that is best for your specific health condition.  

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