If you have someone relying on you financially, be it a partner, children or even aging parents, it is important to have some form of life insurance or income protection in place. If you were to die, this would provide a lump sum to your family that can be used to pay off debts or provide a regular income to help replace yours.
Having some form of protection in place can give you the reassurance that your loved ones will not end up losing the roof over their heads if the worst should happen, and it can help to ease their financial burden during a difficult time.
What if you have a so-called pre existing condition; a diagnosed illness, health concern or injury that you have had or still suffer from at the time of application? Is it possible to get life insurance with existing medical conditions?
Well, insurers fundamentally work on risk, and potential customers are assessed to see how risky they would be to insure. The lower the risk, the less likely the insurer is to have to pay out, so the premiums offered will, in turn, be cheaper.
Unsurprisingly, young, healthy non-smokers tend to be offered the cheapest premiums. They are considered low risk as they are less likely to die during the term of the policy.
On the other hand, providing someone with life insurance after a heart attack would be considered high risk, as there is a chance they could have another one. This can result in higher premiums. If someone poses too high a risk, the insurer may even decline cover.
The good news is, while it can prove trickier to find a provider willing to insure you if you have certain conditions, it is still possible in many cases.
According to insurer Legal & General, the following are some of the most commonly listed examples of pre-existing medical conditions and major life events:
If you suffer from any of these conditions, you may be deemed a higher risk by insurers. However, bear in mind this is not a conclusive list. What’s more, some insurers define the term pre existing condition differently and what is seen as high risk with one provider may not be with another.
Insurers also assess potential customers on a case-by-case basis. So, if your neighbour, who has the same condition as you, has been turned down for life cover from an insurer, that doesn’t necessarily mean you will be too.
Anyone wishing to apply for life insurance would need to complete a life insurance application form directly with their insurer of choice or via an insurance broker.
All applicants must answer a series of health and medical questions, including information regarding your weight, details of how much you drink and whether or not you smoke.
For those applying for life insurance with pre existing conditions, a little more information will be required.
You may be asked details such as the date you were diagnosed, any medications prescribed, your hospital admissions history or referrals and the severity of your symptoms. You may also be asked if you have had to miss work due to your condition, and whether it affects your everyday life.
So, if you’ve had a heart attack in the past, for example, you are likely to be asked:
How severe your attack was
When it took place
Whether you required surgery
What medication you are on
If you have any long-term problems
It is therefore worth taking some time to ensure you have any relevant information to hand before proceeding with an application.
Depending upon your condition, your insurer may ask for a medical report from your doctor. This is quite standard and simply allows the insurer to clarify the details regarding your diagnosis date, treatments and how the condition has affected you. You might also be asked for a medical examination for life insurance to be approved.
Medical underwriters calculate the risk for those needing life insurance with health problems on an individual basis, meaning your quote will be tailored to you, so this extra information is usually required. This can work in your favour.
For example, someone whose type 1 diabetes is well controlled and can be confirmed by their GP will pose less risk, which could mean they are offered more competitive premiums.
Insurers cannot obtain information about you from your doctor without your written consent and while you can refuse, your application for insurance would most probably be declined.
If you are concerned, remember you have the right to see the doctor’s report before it is sent off for consideration, whether it is from your GP or a doctor assigned by the insurer.
If you are unhappy with the contents and it was written by your GP, you can stop the report from being sent, or ask for any inaccurate or misleading information to be changed. If this is declined, you can attach your own written statement explaining the areas that you believe to be inaccurate or misleading.
Life insurance with pre existing conditions policies do tend to be more expensive than those without. You may even wonder if it is worth ‘accidentally’ omitting some health details from the application form, in a bid to be offered cheaper premiums.
However, this would undoubtedly be a big mistake. Insurers will have no qualms in refusing to pay out on claims if information was deemed to have been inaccurate or was withheld at the time of application. There is no point paying life insurance premiums for 20 years just for your family to undergo the indignity of having their insurance claim rejected, as you failed to tell the insurer about a health issue upon application.
What’s more, dishonesty can even be considered fraudulent under the Fraud Act 2006, which could have legal consequences.
Many medical conditions are classed as disabilities by law and the Equality Act 2010 was passed to help protect against disability discrimination. This law states that insurers can only treat you differently (e.g. charge you more) on the basis of your disability if the information it is using is relevant and reliable and what they are doing is reasonable.
So, if an insurer was to charge you a premium that is out of proportion to the risks your condition presents, has failed to explain their reasons why, or justified their decisions based on generalisations, this could be classed as unlawful discrimination.
Refusing insurance because an applicant suffered from a condition in the past that they no longer have could also be classed as discrimination.
If you took out a life insurance policy before you developed your condition, things are pretty straightforward. Provided you were honest at the time of application and had no pre existing condition, the policy is valid and worth keeping in place as it is likely to represent good value.
On the other hand, if you took out a life insurance with pre existing conditions policy when your symptoms were severe and they have since improved, or you have fully recovered, you might be able to save money by taking out a new life insurance policy.
If you have given up smoking since taking out your policy, you are also likely to save money by reapplying, although bear in mind you would need to have not smoked, or used a tobacco or nicotine replacement product, for at least 1 year to be classed as a non-smoker.
Check your policy to see what terms were offered at the time, and consider talking to a life insurance specialist for advice on your circumstances.
Finding the best life insurance policy for pre existing conditions can be complicated, as while all insurers use medical underwriters to calculate your risk, they tend to work to different sets of guidelines. A condition that might be considered severe with one company may not be with another.
This where speaking to an independent specialist life insurance broker could be a good solution. Not only do they have experience in knowing which insurer is most likely to accept you for the lowest premium, they can make recommendations and do the applications for you. You may have to pay a fee for their time, but a good broker is also likely to have access to more competitively-priced policies that can save you money in the long run.
You can find out more about specialist brokers from the British Insurance Brokers Association (BIBA) and check if a broker is registered with the Financial Conduct Authority (FCA).
Charities are also great sources of information. MIND and the Cancer research websites, for example, offer a wealth of contacts regarding insurers that provide cover for those suffering from mental illnesses and cancer.
Once you have found the right life policy, you have a little more work to do to avoid future problems.
Take some time to read through your policy documents. Ensure you have given your insurer all the correct details, and highlight any wording that says you are covered.
If any wording is ambiguous or poorly explained, make a note of it. You should then raise these points with the insurer and ask for the wording to be explained, in writing. It is important to be absolutely sure you understand what you are and are not covered for.
If you do struggle to be accepted for life cover, some providers will still insure you, provided you list your pre-existing condition as an exclusion. This means that the policy will only pay out if you pass away as a result of something other than your listed condition.
There are also a number of companies that offer life insurance policies that ask for no medical information, that you can find out more about in this article. You should also check to see if you already have life insurance or death in service benefit through your employer.
As a final note, depending on the severity of the condition you have, you may be offered very high premiums or declined cover entirely. If this applies to you, take some time to work out if life insurance is the best option for you. Could you use that money for a different type of insurance? Alternatively, could saving, investing, or paying that money into your mortgage be a better option for your family instead?