When considering life insurance applications insurance companies assess the applicant’s risk factors. A riskier applicant will get higher premiums to offset the higher probability that the company will have to issue a payout.
In some cases, the insurance company may even deem an applicant too risky to insure and refuse service.
If you have a heart condition, diabetes, obesity or engage in life-threatening activities, you are considered a high-risk applicant. Here’s what you need to know about it.
It’s More Expensive
Getting life insurance as a high-risk applicant, for example if you have heart disease or diabetes, will make your premiums more expensive compared with a healthy individual. Serious chronic conditions such as cardiovascular problems and diabetes, along with heart attacks and obesity, are contributing factors to mortality and poor health. This, naturally, means a higher risk for the insurance company.
Other groups of applicants that may have to pay higher rates are seniors and those engaging in risky behaviors such as participating in extreme sports, having a rich history of car accidents, and those employed in hazardous occupations.
Rejection Is Higher Than in Low-Risk Applicants
Naturally, rejection rates for high-risk applicants are higher than for healthy individuals with non-risky lifestyles. This, however, does not mean that it’s impossible to get life Insurance after a heart attack or with diabetes.
American Term is a consultancy agency that specializes in helping people from high-risk groups in getting life insurance. They have successfully helped people get life Insurance even after a stent surgery. You can read more about it on americanterm.com.
Many Factors Contribute
Having a chronic condition or engaging in dangerous activities are not the only factors that play a role in deciding whether an insurance company will provide coverage to an applicant.
In the case of diabetics and people with heart disease, medical records, questionaries and exams also play an important factor. In the case of diabetes insurance companies care about the type—Type 1 is considered riskier, and A1C levels. As of heart conditions, especially when the applicant has suffered a heart attack, LVEF is among the primary indicators that determine approval and premiums.
It’s About More Than Current Health
Insurance companies don’t look only at current health indicators. Other health and non-health related factors are also taken into consideration.
Age, for how long the condition has existed and whether the applicant is compliant with the prescribed medication are also considered. Also, past medical records and genetic predisposition to disease. Lifestyle habits such as fitness, diet, smoking, and alcohol consumption also tell insurance companies whether the application is too risky to get insured.
You Can Turn Things Around
People can get rejected for life insurance for two main reasons—factors beyond their control and factors under their control.
The former include age, time since the applicant has been living with the condition and permanent damage to the health due to a disease. The latter group involves lifestyle habits, medication non-adherence, and recency of a life-threatening event (usually applicants need to wait six months after a heart attack to apply for insurance).
Both groups, however, are subject to fixing or at least mitigation by showing the insurance company concrete steps that’ve been taken to improve lifestyle. This includes being diligent with medication, making healthy choices and not engaging in risky activities.
There Are Alternatives
Even if your application for life insurance gets declined, it doesn’t mean you cannot get insured. Some of the alternatives are guaranteed acceptance and no-exam life insurance.
Guaranteed acceptance policies are less strict in their criteria for who can get insured. They come, however, with higher premiums and lower coverage than regular insurance.
As of no-exam policies, they are suitable for applicants who do not wish to get medically examined. This option is usually taken by people with serious cases of diabetes or applicants with low ejection fraction. No-exam policies are more expensive than those that require medical tests.
Your Past Applications Are Accessible to Insurance Companies
The Medical Information Bureau (MIB) is a cooperation between several hundred US and Canadian insurance companies. The purpose of the MIB is to keep a database with information about life insurance applicants.
“By tapping into these data, the insurer can learn something about what other insurers know about the present applicant.” It’s kind of like a credit score database but for life insurance-related data.
This matters for two reasons. First, if an applicant wasn’t honest during previous applications and an insurance company found out it will show in the MIB. Second, if an applicant is rejected by a company, this will also show in the database which might decrease future chances of approval.
Being a high-risk applicant doesn’t mean automatic rejection or unaffordable premiums. Even people who check-off several high-risk boxes can get approved for affordable insurance. Adopting a healthy lifestyle and seeking help from experienced insurance consultants are two ways for high-risk applicants to increase their chances of getting life insurance.