One of every five adults in Canada lives with a medical condition, cancer, diabetes, chronic respiratory disease, and many others.
If you are a Canadian living with a health problem, you might believe that buying life insurance is impossible for you. You may have even applied and been declined, or are yet to start the process because you feel you will not get approved.
While you need to be in perfect health condition to get approved for a policy, the good news is that you can still get life insurance for pre-existing conditions even with your health problems. And depending on your condition and how severe it is, there is good life insurance coverage at reasonable rates too.
So if you have a health condition that is causing insurance companies to categorize you as high-risk or hard-to-insure when you want to buy life insurance, keep reading this article.
This article discusses everything you need to know about buying life insurance for high-risk, hard-to-insure individuals with pre-existing conditions.
Can I Buy Life Insurance If I Have a Pre-existing condition?
If you are wondering if you can buy life insurance for pre-existing conditions, the answer is YES. Insurance companies in Canada still offer insurance options to high-risk, hard-to-insure Canadians with pre-existing conditions.
You may be able to buy life insurance for pre-existing conditions like asthma, cancer, diabetes, heart disease, HIV infection, etc.
Health problems are a risk factor for insurance providers. Even though the chances of living longer are high now due to the medical advances in the world, your current health is still a significant factor in buying life insurance policies.
Some insurance companies in Canada use your past health scares and family medical history to determine your eligibility for life insurance. This can put a hard stop on your shopping for life insurance.
In Canada, only 4% of the individuals who apply for life insurance policies are declined. You still have a chance of getting a good life insurance policy.
Speak with a trained insurance advisor who can guide you towards specialized companies and policies that will benefit you in this situation. Some insurers are more accommodating and offer life insurance for individuals with pre-existing conditions.
However, when you buy life insurance with pre-existing conditions, you will be paying more premiums than others of the same gender and age that do not have any medical conditions. Some insurance companies may also offer modified policies and policies with exclusions for specific health conditions.
Also, each insurance company evaluates you differently. Most companies will likely ask you more medical questions about your health condition and request heightened underwriting should you disclose your health status.
What Are The Types Of Life Insurance For Pre-existing Conditions?
Suppose you want to buy life insurance but will be disqualified due to your health condition. In that case, you should buy one of the life insurance products listed below.
Some companies like Manulife, offer these life insurance policies to suit the individuals living with pre-existing conditions in Canada seeking coverage.
Guaranteed Life Insurance
Guaranteed life insurance is one of the best life insurance for individuals with pre-existing conditions. You can qualify for this policy regardless of your medical history.
You can apply for guaranteed life insurance if you do not qualify for traditional life insurance policies.
It does not involve any medical exam or health questionnaire; approval is guaranteed.
However, the premiums are much more expensive than other insurance policies, and it only pays a small death benefit, usually around $25,000 and $50,000.
Simplified or No-Medical Life Insurance
Simplified life insurance is also one of the best life insurance policies for pre-existing conditions. It offers a short medical questionnaire instead of a medical exam. The questionnaire will not be as comprehensive as underwriting.
The questionnaire will be used to assess your health risk level. The simplified life insurance offers a higher coverage amount than guaranteed life insurance, up to $500,000.
Individuals with pre-existing conditions find this policy much more accessible to apply for than traditional life insurance. However, your policy will be ‘rated’.
Permanent Life Insurance
Only Canadians with minor and well-managed pre-existing conditions can qualify for permanent life insurance. Permanent life insurance provides coverage until they die.
Some policies come with a saving component. They payout a death benefit to your beneficiary upon your death.
However, your premiums will be higher are your policy might be ‘rated’. And only minor illnesses like high cholesterol can qualify.
Term Life Insurance
The term life insurance policy is cheaper than permanent life insurance policies. It protects you for a certain number of years and pays out a death benefit to your beneficiary if you die within the term.
If you survive until the term’s end, you will not receive anything but can renew the policy for another term.
If your pre-existing condition is not severe, you can qualify for the term life insurance. However, you will pay higher premiums and get a rated policy.
Different Types of Pre-existing Conditions
The type of pre-existing condition you have and its severity will determine whether you will get approved for any life insurance policy.
Below are some health conditions that will increase your premiums or possibly lead to a denial from the life insurance companies.
- Diabetes: People with diabetes have a good chance of getting approval if they are at a healthy weight, are not suffering from kidney damage, or are dependent on insulin. You can qualify for a life insurance policy if you are on insulin and do not have a severe diabetes-related complication. However, you will receive a higher premium rate.
- High blood pressure: Only severe high readings on your blood pressure can disqualify you. If your blood pressure is moderately high and well treated, you might get approved with affordable premiums. Because high blood pressure is linked to other severe illnesses like stroke and heart attack, some insurance companies handle it differently. However, if you keep your blood pressure down for 12 months, you can get lowered premiums.
- Cancer: Though there have been significant advances in the approach and treatment of different cancer types, life insurance companies still consider it a significant risk. However, if you have a highly treatable form of cancer and have been in complete remission for two years or more, you will be able to get coverage.
- HIV/AIDS: Some insurance companies offer policies to Canadians living with HIV/AIDS who have lived for 3-5 years beyond the illness and can continue their everyday life and effectively control the virus with medications. You may be able to get a simplified life insurance policy.
How to Apply For Life Insurance For Pre-existing Conditions
It is best to apply for a life insurance policy when you are still in good health, and your pre-existing condition is still well managed, possibly two years without any unfavorable changes in your condition.
Ensure to apply for coverage when you are young. The older you get, the more likely you will develop a complication or other conditions that may reduce your chances of getting coverage.
Be honest with your insurers. If you get approved because you lied or falsified any information on your application, your policy will not pay out any death benefit.
Your insurance company will audit your claim after your approval; if you are negligent or take unnecessary risks, the insurer will deny your payout.
Final Thoughts on Life Insurance for Pre-existing conditions?
If you are living with pre-existing conditions and want to buy life insurance, speak to a licensed insurance advisor.
They have the experience to guide you and suggest the best rates and policies you can apply for. They will recommend life insurance policies you will likely get approved for and point you in the right direction.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.
