If you have a health issue associated with reduced life expectancy, you may have trouble finding a company willing to sell life insurance to you.
Don't give up, says Jack Dewald, past chairman of the nonprofit Life and Health Insurance Foundation for Education (LIFE).
"Not all serious conditions automatically render you unable to get life insurance," he says. "You just may have to pay more."
Most insurance companies will charge a "table rate" in addition to a base rate, says Lisa Oleski, manager of life underwriting at CPS Insurance Services, in Irvine, Calif. This table rate is based on your control of the condition, your treatment of the condition, your date of diagnosis, and results of basic health tests (like blood and urine tests) that your insurer requires once you apply for coverage.
It's impossible to attach an exact price tag to certain health conditions, as insurers take a variety of factors into account, including your gender and age. There are, however, some conditions and habits that are guaranteed to up your rate. Here are four of them:
While smoking isn't an actual medical condition, smoking raises life insurance premiums across the board, regardless of your health status. If you have a health issue and also are a smoker, you'll have to pay a surcharge in addition to a higher base rate, Dewald says.
Exactly how much more in premiums a smoking policyholder will pay differs from one company to the next and depends on the type of coverage the policyholder obtains. For example, the base annual rate for a 40-year-old man buying a 10-year term policy may be $200 for a $100,000 policy if he's in relatively good health. If he smokes, however, the base rate may be $450 instead of $200, and any other health concerns would result in a surcharge.
If you have cancer, there are a few factors that will determine how much your premiums will be and whether you'll even qualify for life insurance. These include the type of cancer, where it's located and when it was detected, Dewald says.
According to Dewald, you'll be unable to get coverage if you have an internal cancer (as opposed to an external cancer, such as skin cancer) or an aggressive cancer (like pancreatic cancer) for the first two years after the diagnosis or during active therapy.
"On the other hand," Dewald says, "most skin cancers won't affect your rates, unless it's advanced melanoma."
If you're stabilized, haven't had a relapse after two to five years and continue to have documented checkups, you should be able to get life insurance, although you'll still pay a higher premium than you would otherwise.
Most importantly, insurance companies look at whether you're following your doctor's advice on lifestyle changes, Dewald says.
"If you had part of your lung removed and you're still smoking, you won't get insurance," he says.
Type 1 diabetes is normally more difficult to insure than Type 2 diabetes, especially if you developed the disease at a young age, according to Oleski. "Those individuals are more prone to complications down the road," she says.
This varies, however, and each carrier has a different way of calculating table rates and surcharges. For example, a Type 1 diabetic who has excellent control of his or her disease and is in otherwise good health might pay about 125 percent to 150 percent extra on top of the standard rate.
4. Heart disease.
Several factors will determine whether someone with heart disease gets life insurance, Oleski says. For instance, insurance companies will look more favorably upon someone who's had a heart attack, compared with someone who's had surgery to implant a stent (a tube used in preventing heart blockages) or had heart bypass surgery. The person's age and whether he or she has had multiple surgeries also will be weighed.
"If you're at a healthy weight, you don't smoke and you've been cleared by a stress test, you should be able to get insurance six to nine months post-surgery," Dewald says.
Uninsurable at any cost
Certain health conditions mean you'll automatically be declined for life insurance, Oleski says. These include:
• Current or recent treatment for alcoholism or drug addiction.
• Current cancer treatment.
• Kidney failure.
• Severe emphysema.
• Alzheimer's disease or dementia.
• Severe mental disorders.
• Lou Gehrig's disease.
• Cirrhosis of the liver.
• The need for continual use of oxygen.
• Heart disease before age 35.
Shop around for the best rates
If you have a serious health condition, shop around. Not every company disqualifies people for every health condition, Dewald says. Some companies offer more favorable terms to those with heart problems, while others may be more flexible with diabetic patients. An independent agent or broker who does business with several companies is best suited to recommend a life insurance company.
Dewald says that if you're uninsurable, you may be able to acquire life insurance through your husband or wife if you're married. This is common in estate planning.
The best thing to do to avoid health-related trip-ups with life insurance? Buy a life insurance policy when you're healthy, says Jack Dolan, a spokesman for the American Council of Life Insurers, a trade group.
"No one will give you homeowner's coverage when your house is on fire," Dolan says. "You get the coverage when your house is in good shape. Apply the same thinking for life insurance."