How to buy life insurance for sick people

Learn about your options if you're sick or have a pre-existing condition working against you.

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If you have a health condition or a history of critical illness, you can still get life insurance — but your options may be limited. To overcome the challenge your sickness poses, maintain your medical treatment and look to insurers and agents that specialize in insuring high-risk applicants.

How do I get life insurance when I’m ill?

An illness won’t necessarily disqualify you from getting a life insurance policy. The key is finding a policy that meets your needs and your budget.

Here’s how to get started when weighing your options:

  • Work with a specialized agent. Look for an agent that specializes in high-risk coverage. These agents may be more familiar with affordable policy options for those who are ill, and they can give you an idea of the limitations you can expect. With this information, you can apply with companies you’re likely to see approval with.
  • Consider “guaranteed issue” insurance. If medical exams are holding you back, ask about guaranteed issue policies, which skip the health questionnaire and medical exam. Premiums are generally higher, offering less comprehensive coverage.
  • Be upfront and transparent. It’s tempting to massage the details of your illness or history to get better rates. But if you’re caught, your provider can cancel your policy without a refund. And you risk your beneficiaries losing your policy’s payout.
  • Continue managing your illness. Follow your doctor’s orders and stay in contact with your insurance company. If your situation improves or shows promise of remission, you might be able to request a new medical exam to open up eligibility for lower premiums.
  • If a provider turns you down, try another. Not all companies consider sickness — or individual illnesses — in the same way. While one insurer may say no, another might be willing to take on a pre-existing condition affordably.
  • Wait, if you’re able. If your illness is temporary or you’re under treatment for a curable disease, consider waiting. Some providers are willing to extend decent rates just as soon as your doctor can show you’re as healthy as the general population.

What are the best policies for people with chronic conditions?

If you’re properly treating and managing your chronic condition, you’re in a good position to get coverage. Depending on your needs, you could apply for the following types of policies:

  • Term life insurance. The simplest and cheapest policy, term life insurance offers coverage for a set period of time and is designed to expire at the same time as your major financial obligations.
  • Whole life insurance. If you want to treat your policy as a cash asset, look into whole life insurance. It builds cash value over time at a fixed rate of return, so it’s less risky than some other permanent policies.
  • Simplified issue life insurance. To skip the medical exam, consider a simplified issue policy. You’ll need to complete a health questionnaire, but as long as your chronic condition is under control, you’ll likely be accepted.
  • Guaranteed issue life insurance. If you’d prefer to forgo both the medical exam and health questionnaire, consider a guaranteed issue policy — but be prepared to pay a higher premium.

Life insurance policies that don’t require a medical exam

My illness is terminal. What are my options?

Many insurers offer a category of coverage referred to as funeral insurance (sometimes called “final expense life insurance”). Sometime confused with burial insurance, which is only a part of the coverage offered, these policies are designed to cover end-of-life funeral costs including a chapel, musical services, transportation and preparation of the body, burial and professional and administrative expenses.

Similar to guaranteed-issue policies, final-expense life insurance comes with no underwriting and often doesn’t require a medical exam. Though you’re likely to pay high premiums for smaller amounts of coverage — typically up to $10,000 or more.

How can my illness affect my rates?

When you apply for any insurance, your personal, financial and medical information goes through underwriting. Underwriting is a risk assessment process where an insurer analyzes the amount of risk associated with your health and lifestyle. They then compare this data against actuarial tables for the probability of death for the average person your age and demographics.

Depending on the results, your provider will classify you within tiered categories that can include:

  • Preferred Plus
  • Preferred
  • Standard Plus
  • Standard
  • Preferred/Standard Smoker

Preferred plus policyholders often get the cheapest rates, with rates increasingly more expensive as you drop down in tiers.

If your health history or illness is particularly complicated, you may be placed in a “substandard” category, where your premiums fluctuate depending on the complications. If this is the case, compare your rates to that of “guaranteed issue” insurance to see which is the more affordable option.

Which health conditions affect my rates?

Companies vary in how they view a person’s overall health and specific illnesses. The key appears to be how much control you or your treatments have over the condition. Common conditions and illnesses that can affect life insurance rates include:

  • Cancer. Your eligibility for coverage after cancer depends on the type of cancer you had and how aggressive it was. But a diagnosis doesn’t necessarily mean you won’t be considered for life insurance. This is also the case for those with a personal or family history of cancer.
  • Heart disease. Providing your insurer with the severity of your condition can help it accurately evaluate your coverage.
  • High blood pressure or cholesterol. This is a common condition, but it’s weighed heavily in underwriting because it’s thought to lead to more severe health issues.
  • Weight-related conditions. If your condition is severe, it will affect your premiums and potentially your ability to get life insurance.
  • Diabetes. Here too, the disease can increase your chances of potentially life-threatening complications.
  • Organ transplants. If you’re recovering from an organ transplant with no complications, your condition may not impede getting life insurance.
  • Mental health conditions. A complicated issue for insurers, mental health conditions are varied and often managed with care and medication. While one condition may not prove an issue, others like dementia or substance rehabilitation can make it difficult to get coverage.
  • Smoking. The longer you wait to apply for life insurance after quitting smoking, the better your chances for lower premiums. One year after you quit, you’re often considered a nonsmoker.
  • Sleep apnea. This condition affects your quality of sleep and affects your risk of other health conditions.

No matter your illness, if you can prove that you’re following all medical suggestions to manage your disease, your provider may consider you less of a risk, thereby increasing your chance of acceptance and stronger rates.

Critical illness insurance

Compare rates from multiple life insurance companies

Name Product Types of Insurance Coverage Range Issue Ages Medical Exam Required Province Availability
PolicyMe life insurance
Life Insurance
$100,000 - $10,000,000
18 - 80 years old
No
Ontario, Alberta, Manitoba, New Brunswick, British Columbia
Get advice and compare life insurance quotes from multiple companies in the industry with PolicyMe.
 Life Insurance Through PolicyAdvisor
Life Insurance
Mortgage Protection
Disability
Critical Illness
$25,000 - $5,000,000
18 - 72 years old
No
Ontario
Policy Advisor is a digital life insurance brokerage that has partnerships with 17 insurers in Canada.
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Bottom line

If you’re finding approval for life insurance difficult due a pre-existing, chronic or terminal illness, you have options. Start by exploring agents that specialize in high-risk policies to learn about companies known to cover people in your specific situation.

From there, compare life insurance companies and weigh their policies with your needs and budget.

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