Ready to buy life insurance? You can expect that an underwriter will put your application under a highly magnified microscope. Multiple factors are considered before you are — or aren’t — offered a policy:
Your financial status.
Any risky pastimes you may have.
Your lifestyle (particularly any tobacco, alcohol or drug use).
Armed with actuarial tables drawn from the company’s claims history, the underwriter will place you in a risk class based on the likelihood that you will expire before your policy matures, thus forcing the company to take a loss on you.
Those deemed a good bet to go the policy distance may qualify for the preferred or preferred-plus rate class (offering the best rates). Riskier applicants may qualify only for standard or substandard rates, while some individuals may be deemed too risky to insure.
Which health conditions are most likely to adversely affect your life insurance rate?
We asked Stephen Bloom, the retired chief underwriter for New York Life, and Dr. Jacki Goldstein, vice president and chief medical officer for MetLife, to walk us through the top 10 costliest health hazards for a 40-year-old man.
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High blood pressure
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Just because your blood pressure has never remotely approached 120 over 80 doesn’t mean you won’t be offered an attractive rate on a life insurance policy.
“The industry underwrites very favorably individuals who have high blood pressure that is well-controlled and well-managed,” Goldstein says. “If your physician started you on some medication and it shows by a couple of readings that you’re in really good control, most carriers would look at that very favorably.”
Of course, that doesn’t mean that the insurer won’t want to take a peek under the hood, and for good reason.
“High blood pressure that’s not well-controlled can lead to a lot of end-organ diseases like coronary artery disease, stroke, kidney damage, peripheral artery disease — a lot of different vascular complications,” says Goldstein.
Still, someone with high blood pressure might qualify for a preferred policy.
“Different carriers have different categories of preferred,” she says, “but yes, high blood pressure that is well-managed, most carriers would have that qualified for preferred.”
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Type 2 diabetes
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Underwriters are notoriously wary of Type 2 (or adult onset) diabetes because it can lead to coronary artery disease, peripheral vascular disease, renal failure and blindness.
“It absolutely can affect risk class because there are a lot of potentially life-threatening complications that can result from diabetes,” says Goldstein. “Most carriers will look through the rest of the overall application to see if there is any history of those complications that can arise as a result of the condition.”
Contrary to most factors that affect life insurance rates, youth works against the Type 2 diabetic. “If I get diabetes at age 70, I might already have coronary artery disease or a stroke anyway, so the impact of the diabetes might not affect my life expectancy in the way it might a 40-year-old,” Goldstein says. “A 40-year-old is unlikely to qualify for preferred, in my experience.”
Bloom says the key to insuring a diabetic is how the condition is being managed.
“We would take into consideration whether the proposed insured is under the care of a medical professional and whether the condition is well-controlled,” he says.
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Some people often stop breathing while sleeping or can fall asleep without warning, such as when driving a motor vehicle.
These life-threatening health conditions, known as sleep apnea and narcolepsy, respectively, will almost certainly serve as a wake-up call for a life insurance underwriter.
The dangers are obvious if a person with narcolepsy suddenly falls asleep at the wheel. As for sleep apnea, it “can be associated with high blood pressure, coronary artery disease, etc.,” Goldstein says, “so it’s more those associated issues that make it a risk classification matter.”
That said, she also has good news for sufferers of this rare condition.
“I don’t want to say that it never affects the risk class, but even if it is a severe degree of sleep apnea, if it is well-controlled and well-managed, they can get very favorable underwriting. It’s only when it is severe and untreated that it becomes a risk classification issue,” she says.
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Heart disease is a red flag for a life insurance underwriter because a massive heart attack can be sudden and deadly. But an underwriter’s concern doesn’t begin and end with “the big one.”
“Heart disease is not one condition; it’s a conglomerate of many conditions,” explains Goldstein. “Each condition has to be looked at separately.”
Because the severity and progression of heart disease can be difficult to document, underwriters typically take a second look at the applicant’s family tree for guidance.
“Generally, this is associated with immediate family members — father, mother, sister, brother — who may have developed heart disease or had a stroke,” says Bloom. In addition, a 40-year-old man may be asked to undergo an electrocardiogram prior to becoming insured.
Will heart disease keep you out of the preferred risk class?
“In general, coronary artery disease in a 40-year-old would usually be looked at carefully and could be something that is rated (not preferred),” says Goldstein. “If the heart has significant damage to it so that it is not pumping effectively, it could actually be a situation that is not insurable.”
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Asthma is a chronic respiratory condition in which the airways suddenly and unexpectedly constrict, causing coughing, wheezing, shortness of breath and a tightening of the chest. It is typically managed with a combination of long-term control medicine to reduce airway inflammation and short-term rescue inhalers to relieve sudden flare-ups.
“Asthma is one of those very common conditions,” says Goldstein. “There are asthma deaths, but for individuals who are under good medical care, that would be a rare circumstance.”
An underwriter’s concern about asthma would likely rise in relation to the severity of the condition and how well it is managed. “Although we hardly ever see this, if someone who has asthma is ending up in the hospital several times a year, that would be a less favorable risk,” she says.
Should an asthma sufferer aspire to a premium rate class? Absolutely, says Goldstein.
“An individual who has well-controlled asthma could well be a preferred underwriting risk. For the most part, asthma will be extremely favorably underwritten,” she says.
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The “Big C” on an application form will put any life insurance underwriter on alert. But cancer’s ultimate effect on an applicant’s rate class can range from negligible to substantial.
Just as each cancer case is unique, every insurance company will underwrite the disease differently. For instance, Bloom says New York Life might take six months to a year to monitor some applicants before writing a policy, depending on the location of the cancer, the staging and type of treatment involved.
Goldstein adds: “We do underwrite cancers. There are many, many cancer histories that can be favorably underwritten and some that possibly could be preferred.”
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One health hazard on our top 10 list can, in one way or another, contribute to most of the other nine: obesity.
Centers for Disease Control and Prevention statistics indicate that more than one-third of adult Americans are overweight and another third are clinically obese. Overweight or obese people face a higher risk of heart disease, Type 2 diabetes, high cholesterol, high blood pressure, sleep apnea, stroke, arthritis and gynecological maladies.
Goldstein says insurance companies calculate an applicant’s body mass index, or BMI, when determining their risk class.
“We certainly consider obesity as a health condition,” she says. “Some individuals who get very, very heavy could end up having rated (substandard) policies. Individuals who are very morbidly obese might not even be insurable.”
Obesity isn’t the only weight-related health concern. “Likewise, people who are underweight, malnourished, that is also a health condition,” Goldstein says.
How might anorexia affect an applicant’s rate class?
“If they’re in remission and their weight is more ideal, they can definitely get underwritten,” says Goldstein. “But individuals who currently have active anorexia nervosa, those would be concerns.”
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Organ transplants are serious business, which explains why insurance underwriters treat them on a case-by-case basis. Some insurers steer clear of transplant patients altogether, with the exception of some kidney recipients.
“It really depends,” says Goldstein. “Obviously, corneal transplants would be very insurable, but the heart transplants and liver transplants haven’t been looked at quite the same as the kidney transplants.”
Goldstein says most life insurers will underwrite the recipient of a kidney transplant barring any complications, in part because it’s among the most routine organ transplants. “Assuming that they’re recovering from their surgery, they’re doing very well, they’re not having any complications from the transplant, kidney transplants can be underwritten,” she says.
But recipients of liver or heart transplants may not find many companies willing to insure them.
“There just hasn’t been as much experience to be able to know exactly what the risk classification should look like,” Goldstein says. “I would be reluctant to say that nobody is doing that, however.”
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Depression is the one mental health condition that can really drive up your life insurance rate, and for good reason: When this psychological condition becomes severe, it can lead to suicide.
“With depression, there really is a spectrum,” says Goldstein. “Some can be very favorably written and even could be preferred, depending on the degree, the severity and how well it is managed.”
But the story can be much different at the opposite end of the depression scale.
“If you had someone who had severe, major depression, lots of hospitalizations, lots of suicide attempts, that individual would not be rated as favorably, and possibly might not even be insurable,” she says.
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While not a disease per se, high cholesterol is thought to contribute to the type of life-threatening conditions that life insurance companies like to avoid. The Centers for Disease Control and Prevention estimates that 71 million adult Americans have elevated cholesterol levels, raising their risk of heart disease.
“The concern with high cholesterol is that it is a risk factor for the development of a lot of vascular conditions, including coronary artery disease, stroke and other atherosclerotic kinds of disease,” says Goldstein.
Life insurance underwriters tend to treat high cholesterol as they might high blood pressure.
“High cholesterol, if it is managed, it’s going to be offered preferred,” says Goldstein. “To the extent that it is well-managed and well-controlled, it can be very favorably underwritten.”