A chronic illness diagnosis can be difficult news to hear. Though it takes some time to adjust to a chronic illness diagnosis, many people with chronic diseases can learn how to manage their pain with proper medical care and some lifestyle changes and live long and fruitful lives. Having a chronic illness doesn’t change the fact that you still have people in your life who depend on you.
Just because you have a chronic illness, it doesn’t necessarily mean your rates will automatically raise to an unaffordable amount. And it doesn’t necessarily mean the quality of coverage will plummet either. Depending on the type of chronic illness you have and how well you manage it, you can find affordable term life insurance rates or permanent life insurance with a better length of coverage. Let’s talk about what type of insurance options you have and what factors beyond just your health will be considered.
What Type of Insurance Can I Get With a Chronic Illness?
The type of insurance available to you depends on the chronic illness you have and how it’s managed.
People with chronic diseases can still get life insurance, and they can still get a policy at an affordable rate. With this being said, the type of chronic illness and how well it is managed are factored into what type of insurance you can get. With a well-managed chronic illness, you can easily find an affordable term or permanent life insurance policy. On the other hand, if you have a terminal chronic illness or a newly diagnosed illness that you are still working to manage, a guaranteed or simplified life insurance policy may be a better option.
Term life insurance
Out of all the life insurance types you can find, term life insurance policies tend to be the most affordable, even with preexisting conditions. Term life insurance provides you with a certain amount of coverage over a pre-determined amount of time. When you get a term life insurance policy, your premium will be determined by your life insurance company by considering the amount of coverage you need, your age, your gender, and your health.
Sometimes, a medical exam will be required for you to get a term life insurance policy. During your medical exam, you will likely be asked about the following:
- Your family health history
- Your health history
- Your hobbies
- Your driving record
Though you may have to undergo a medical exam, you are still likely to qualify for term life insurance policies unless your chronic illness is terminal or completely diminishes your quality of life. Compared to other types, term life insurance tends to be the most affordable option.
Also Read: Questions to Ask Before Buying a Term Plan
Permanent life insurance
Whereas a term life insurance policy is set to cover you for a certain period of time, permanent life insurance does not have a term limit. And like term life insurance, too, people living with chronic illnesses are likely to qualify for a policy—unless that illness is terminal or severe. But, where term life insurance plans tend to be pretty affordable—depending on your needs—a permanent life insurance policy gets a bit pricier. Permanent life insurance policies accumulate a cash value over time, and that cash value can be borrowed against. If you can afford a higher premium payment, permanent life insurance could be the right option for you if you have a higher life expectancy.
Guaranteed life insurance
In an instance where your chronic illness is severe or inhibits you from passing a medical exam, there are still life insurance options for you. Guaranteed life insurance is a type of whole life insurance, but you are able to get it without a medical exam. Despite having no medical exam, there is generally a long waiting period for a guaranteed life insurance policy to go into effect and many have an age requirement.
Guaranteed life insurance is a great option for people who cannot pass the medical exam required by other policy types, but that means that the price is much higher than that of a typical term or permanent policy and the coverage tends to be less comprehensive. For people with terminal illnesses or senior citizens without a life insurance policy in place, guaranteed life insurance may be the right option.
Simplified life insurance
Aside from guaranteed life insurance, there is another way to get insurance without a medical exam: simplified life insurance. Simplified life insurance has a short waiting period and people are generally asked a minimal amount of health questions. This type of life insurance policy is best for people who need coverage quickly and likely cannot pass a medical exam. As opposed to guaranteed life insurance, simplified life insurance can have a better range of coverage. But, just like guaranteed life insurance, you can expect a higher life insurance rate because your medical information is not considered in your policy.
How Will My Chronic Illness Change My Rates?
Your life insurance rates will fluctuate depending on what insurance companies consider your “risk factors”
If you do look into getting a life insurance policy that requires a medical exam, the results of that medical exam can change the rate of your insurance policy and how much coverage you are approved for. While you can’t “fail” a life insurance medical exam, the exam will rate your risk factors and classify your health within tiered categories. From best to worst, the classifications may be:
- Preferred or premium
- Standard
- Sub-standard
In the preferred plus category, you can expect to get the cheapest rates for life insurance. If your health conditions are a little bit more complex, you may be grouped into a sub-standard category. In the standard or sub-standard categories, your rates will change depending on the complexity and severity of your chronic condition.
What Other Factors Will Be Considered?
Your insurance rates aren’t just considered by health—factors like age, family history, and hobbies are considered, too
While your health is a part of how your life insurance premium and coverage are determined if you opt against no-medical exam insurance, it’s not the only factor considered. Among your health, your family history, driving record, and even gender can impact your coverage. Let’s talk about some of the factors that will impact your rates.
Age
When you try to find a life insurance policy, the younger you are, the better your rates will be. In fact, your age is one of the biggest factors life insurance companies consider. In most cases, the younger you are, the less risk you pose to life insurance companies. Even life insurance medical exams get a bit tougher as you age.
Smoking
If you needed a sign to quit smoking, here it is! Because smoking contributes to a plethora of health problems, someone with a smoking habit is more likely to pay higher for life insurance than someone who never smokes. If you lie about smoking to your insurance company and get caught, your policy will more than likely be canceled.
Hobbies
Living life on the wild side with your hobbies is sure to increase your life insurance rates. If you are into risky hobbies, or even if you have a dangerous job, life insurance companies will charge you much more than they would if you have less risky hobbies.
Driving record
Yep, even how well you drive is taken into account when finding a life insurance policy. During the underwriting process, you can expect your life insurance carrier to look at your driving record. With this being said, your record from the past three to five years is what your insurance carrier will look at the most. So, if you’ve had a clean driving record in the last few years, you can expect a bit of a break from this factor.
Family medical history
Insurance companies will ask you some questions about your family history to see if you are more likely to develop the same serious medical conditions in your own life. Typically, you will be asked about the medical history of your parents and your siblings. If anyone in your family had a medical issue that caused early death, your rates for insurance may change.
Gender
Believe it or not, yes, your gender does play part in your life insurance rates. On average, women have a higher life expectancy than men. Because of that, women are more likely to have lower life insurance rates compared to men.
Just because you have a chronic illness doesn’t mean you can’t get a life insurance policy. While your health does play a factor in how much your rates and coverage will be, someone who can manage their chronic illness well can still find affordable life insurance policies. And for people with more complex and harder-to-manage illnesses, there are still life insurance options you can get to support your family.
