Can I Buy Life Insurance With a Preexisting Medical Condition?

What Is a Preexisting Condition?

A preexisting condition is a health issue that was diagnosed or treated before the date you apply for insurance. Life insurance companies ask about your health history as part of the underwriting process, which helps them determine your level of risk. Each company may have different criteria for covering people who have previous medical issues.

The following are examples of preexisting medical conditions that may complicate the process of buying life insurance:

• Anxiety
• Asthma
• Cancer
• Depression
• Diabetes
• Epilepsy
• Heart disease
• High blood pressure
• High cholesterol
• HIV/AIDS
• Liver and kidney diseases
• Neurological disorders
• Obesity
• Respiratory diseases

This isn't an exhaustive list, and every life insurance company may treat these illnesses differently. Some health issues—such as obesity or high cholesterol—may not greatly impact your cost or access to life insurance. But some insurers have specific waiting periods that apply after receiving final treatments for serious illnesses, such as cancer. It may be just one year or a decade before an insurer may be willing to insure a survivor.

How Preexisting Conditions Impact Life Insurance

In most cases, life insurance companies consider the health of a person who's applying for a policy. They may require a medical exam as part of the underwriting process. As part of the exam, tests may include:

• Blood and urine tests to look for things like blood sugar issues, high cholesterol or diseases such as HIV
• Blood pressure measurements
• Height, weight and BMI measurements

Applicants may also be asked questions about tobacco or drug use and be asked to provide their history.

A preexisting condition does not automatically preclude you from getting life insurance, but you may pay more for premiums—possibly up to 10% more per year—and be approved for a reduced death benefit. You may also need to wait until you are well past treatment before you can sign up for life insurance.

Types of Life Insurance to Consider With a Preexisting Medical Condition

Whether you're shopping for life insurance with a preexisting condition or not, the many different types of life insurance can be confusing. Finding the right life insurance means shopping for the most affordable policy that grants your beneficiaries the maximum death benefit.

Below are different types of life insurance policies to consider.

Guaranteed Issue Life Insurance

Guaranteed issue life insurance is a type of permanent life insurance that's guaranteed to pay out a death benefit. The criteria to qualify is typically broad, such as simply meeting age limits, and there are no medical exams during the application process. These factors make guaranteed issue life insurance ideal for someone who has been diagnosed with a serious illness.

There are some drawbacks, however. Guaranteed issue life insurance is often more expensive than some other plans and tends to pay out modest benefits. Additionally, if you were to pass away within the first few years of having the policy, your beneficiaries might only get the money you paid in with added interest, rather than the policy's full death benefit.

Term Life Insurance

Term life insurance is purchased for a set period of time, from a single year up to 30, and pays out if you were to pass away during the policy term. Term insurance is typically the most affordable life insurance option. A medical exam may be required, particularly during renewal periods, which may make it more difficult for someone diagnosed with a serious illness currently or in the past to take out a policy. There may also be a waiting period of several years after a serious illness before consumers can buy term life insurance.

Group Term Life Insurance

Group term life insurance is typically offered by an employer. It is a limited policy with lower coverage, generally offered as an employment benefit. It may end if you leave your job, or you may be able to take it with you as an individual policy. There is not usually a medical exam, so this type of insurance is easier to get even if you've been diagnosed with a serious illness.

Whole Life Insurance

Whole life insurance is a form of permanent life insurance. It is designed to last your whole life, pay a death benefit at any point and accrue a cash value as you pay premiums. This cash value can be used to loan yourself money later in life. But whole life insurance policies have more expensive premiums—up to 15 times as much as term life insurance. There may be a waiting period after remission of serious illness before consumers may purchase whole life insurance.

Universal Life Insurance

Universal life insurance is another form of permanent life insurance. It offers more flexibility than whole life does, letting you adjust your premium payments or modify your desired coverage while still offering a death benefit throughout your life. Like other permanent life insurance policies, you may face higher premiums after a recent diagnosis of a serious illness.

Tips for Buying Life Insurance With a Preexisting Condition

If you have a preexisting condition and want to buy life insurance, these strategies can help you find coverage at an affordable rate:

• Determine your needs. Calculate how much you can afford to spend on premiums and how much your beneficiaries would need after you pass. Target plans that come close to both numbers.
• Make lifestyle adjustments. Every positive step you take to preserve your health may increase your chances of getting life insurance coverage. Try to get proper medical care, continue to exercise as allowed and possibly lose weight if applicable.
• Shop around and compare rates. Every insurance company has its own underwriting criteria for policyholders with preexisting conditions. Compare policies among several providers to find the best rate.
• Get help from an independent agent or broker. These professionals work with multiple insurance agencies instead of representing just one. So they can help you navigate the application process and potentially find a company that's more lenient toward policyholders with your underlying condition.
• Be honest and transparent. It's important to disclose your relevant medical information when applying for life insurance. If you leave out or falsify information, it may lead to insurance fraud. The insurance company may deny benefits or void your policy if it finds out.
• Manage your medical condition effectively. Managing your medical condition helps lower the risk to a potential insurer. You can do this by seeing the right specialist and following their treatment plan.
• Time your application. Life insurance companies may set a timeline for when you can apply for a policy after completing treatment for an illness. As you research policies, compare these timelines and when they apply.

What to Do if You Are Denied Life Insurance

If you've been denied coverage for life insurance or can't find an affordable policy, you still have options. For instance, you could apply after you've completed treatment for your condition and fulfilled any waiting periods that apply.

Another option is taking out guaranteed issue life insurance. These policies typically come with lower death benefits, but they have flexible eligibility requirements and no medical exam.

Or, rather than buying life insurance, you could take the money you would have spent on premiums and invest the funds. Carefully managing an investment account can help you leave money to your family members after you pass away. Just be sure to create an estate plan to document your wishes and potentially reduce the tax load.

The Bottom Line

It's possible to get life insurance when you have a preexisting condition, but your policy may come with higher premiums because of your increased risk. One way to help lower your rates is checking your credit score and taking steps to improve it. Insurance providers in many states can consider your credit-based insurance scores when setting your premiums.

These scores differ from consumer credit scores but are based on many of the same elements, including your payment history and existing debt. Lower credit-based insurance scores could mean higher life insurance premiums.

Taking action to improve your consumer credit score could boost your credit-based insurance score too. Implement good financial habits such as paying down debt and paying bills on time, and you could save money on life insurance.