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How to buy life insurance for sick people

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Even if you’re turned down by a provider, you have options for coverage and peace of mind.

Purchasing life insurance when you’re young and healthy is ideal, helping you land low rates that can carry across a policy. But life doesn’t always go as planned.

If you have a history of illness, or even if your history includes a critical illness you’ve long recovered from, it can feel like an uphill battle to find an affordable policy or provider approval. But with research and perspective, you can find coverage and peace of mind that your loved ones are taken care of when you’re no longer around to care for them.

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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 often know about companies offering the most affordable policies to those who are ill, and they can give you an idea of the rates and limitations you can expect. With this information, you can apply only with the 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 exam and underwriting altogether. Premiums are generally higher, offering less comprehensive coverage. And it’s term life — which means it’s temporary.
  • Be up front 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.
  • Find a support group. Talk with others facing the same circumstances. Chances are they’ve faced a similar situation, offering insight on options you may not have considered. It’s also nice to talk with people who understand what you face.
  • If a provider turns you down, try another. Not all companies consider sickness — or even individual illnesses — in the same way. While one insurer can say no, another might be more 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 healthy as the general population.

My illness is terminal. What are my options?

Many insurers offer a category of coverage referred to as final-expense life insurance. These whole life policies focus on providing coverage for end-of-life medical bills and funeral costs.

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 $10,000 to $20,000.

When you die, your beneficiaries can use the cash payout however they see fit.

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 whereby an insurer analyzes the amount of risk associated with your health and lifestyle. They then compare this data against actuarial tables that 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 the 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?

Your classification depends on the type and severity of your illness, but general sickness shouldn’t keep you from looking for a policy.

Companies vary in how they view a person’s overall health and specific illnesses. Because one company refuses you due to your medical history doesn’t mean that all providers will do the same. 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 provider may ask to monitor you for up to a year before it determines your coverage. But with so many types, a cancer 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.
  • Obesity and 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 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.
10 health conditions that can affect your life insurance premium

Considerations when looking for a policy

When weighing policies, consider the coverage you’re extended against the premiums you’ll have to pay. If the policy doesn’t cover your needs, it’s may not be worth it, at any cost. Nor is a policy worth taking on if the premiums are beyond what your budget can afford.

Understand when your coverage will starts and end, if there’s a chance that costs could increase and if it includes disability insurance, critical illness insurance or any other special coverage.

Depending on the severity of your illness and the chances of recovery, term life insurance may be a better option. Term life insurance is temporary coverage with a stated expiration date, which often results in lower premiums. Because it’s designed to cover you until your death, whole life insurance is typically more expensive.

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 for their willingness to cover people in your specific situation.

From there, weigh your options against your needs and budget, and ask an agent questions about anything you might not understand.

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