Purchasing life insurance is very easy in this era, and rates are also lower due to competition. If you’re a healthy person, you can purchase a policy worth a million dollars at a premium that is less than the price of two pizzas.
However, if you have some pre-conditions, you’ll face challenges in acquiring competitive life insurance.
What is a Pre-Existing Condition?
A pre-existing condition means a health condition in the past or present. Some are severe, but all of them impact your monthly premium cost. Some significant conditions include heart disease, cancer, stroke, etc.
How Can Pre-Existing Conditions Impact Insurance Cost?
When you apply for insurance, the underwriter will collect information about your health history and lifestyle. Your rates are based on a scale that goes from preferred plus to substandard.
Companies use several underwriting guidelines that can shift your rates on the scale. Since companies use proprietary guidelines, some will increase your premium for a specific condition, while some may not.
Which Medical Conditions Can Impact Insurance Cost?
Most companies will consider the management of the health issue and its severity. For example, high cholesterol is a dangerous disease if you don’t go for its treatment. However, your agent won’t increase your rate if you’re managing it properly. However, if you don’t handle it, your rates can be high. The underwriters require the following information about the disease:
- The severity of the condition
- Current condition or historical
- Time since first diagnostic
All of these can impact your insurance cost if you’re at the extreme of any of the conditions. For example, if your lifestyle is careless, your rate would probably be higher.
What’s the Best Insurance for a Person With a Pre-Existing Condition?
Most companies have some incentive for several medical conditions. Also, you can impact your risk with the policy type when you’ve pre-existing conditions.
Term Life Insurance
They have the most affordable rates and are locked for a term of 10-30 years. Therefore, you can lock payments at low rates.
Permanent life Insurance
The costs are high for this type, but once you choose it, it is a guarantee that you’ll receive coverage. Also, it builds cash value over time which you can avail of through loans and withdrawals.
Final Expense Insurance
These are for older individuals aging between 50-85 years. Companies also require applicants with several medical conditions and have liberal guidelines to accommodate senior applicants. Since they are whole life insurance policies, the benefits are the same as a traditional whole life policy.
Guaranteed Issue Insurance
It’s generally for people who have multiple or severe conditions. The company doesn’t consider your health condition, and in exchange for an unknown disease, these policies have a 2-year waiting period when they’ll pay a modified death benefit. However, the person receives the same benefit in case of uncertain death.
Group Life Insurance
It is guaranteed issue insurance, and the health conditions won’t affect the premium rate. However, some companies consider the rate if you add your family members to the policy.
Life Insurance Riders for People With an Existing Condition
Some most popular riders are as follows:
- Accelerated death benefit involves the company providing a death benefit to the policyholder if they get an illness.
- The long-term care rider involves the company paying a monthly benefit if the policyholder has to spend time in a nursing facility for a long time.
- The waiver of premium allows the policyholder to keep in effect their policy in case they encounter a disability and can’t afford the payment.
- Some companies charge a flat extra for high-risk applicants, depending on their hobbies. It can be $5 for every $1000 of the death benefit.
What Can You Do if You’re Denied Insurance?
You may be denied insurance if you have a life-threatening disease. But you shouldn’t worry because you can turn to independent agents who have a list of many companies and a history of solving complicated cases.