Life insurance and pre-existing conditions

Best* Life Insurance for Pre-Existing Conditions

How do I find the best policy for my pre-existing medical condition?

There's no one particular policy that's the best for anyone with a pre-existing medical condition. However you may be able to find quality cover for you specific circumstances by:

  1. Comparing your options with an adviser
  2. Following our guidelines for determining value

How do insurers treat pre-existing conditions?

And can you get life insurance if you suffer from one? In recent years Australian life insurers have become more flexible in how they treat people who suffer from pre-existing medical conditions. Depending on the type of ailment, life insurers will typically either:

  • Automatically cover the condition.
  • Request additional information about the nature of the condition.
  • Exclude the condition from being covered.

This article aims to give you a straightforward breakdown of how life insurance and pre-existing conditions work, so that you can make a fully informed decision when it comes to comparing and taking out cover.

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Coverage is the amount of money that you will be paid in the event of a claim. An insurance consultant can help you determine an appropriate amount. Calculator
Provides a lump sum payment if you become totally and permanently disabled and are unable to return to work.
Provides a lump sum payment if you suffer a serious medical condition. Cover can be taken out for 40-60 medical conditions depending on the policy you choose.
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Guidelines to finding valuable life insurance for pre-existing medical conditions

If you do have a pre-existing condition, you can follow these general guidelines to determine if a product is valuable to you:

  1. Check it's definitions. Does the policy have a clear definition on what it considers a pre-existing medical condition? For instance some policies can consider a consultation with a doctor a pre-existing medical condition.
  2. Check for assumptions. Policies may not ask about your specific condition and simply exclude anything not disclosed.
  3. Look for applications that ask about your specific condition. Specific questionaries allow you to disclose the nature of your condition to your insurer in greater detail. This means that your insurer will have better understanding of your condition and how it will be covered (as opposed to just denying you cover outright). An insurer will be able to tell you whether or not you are covered upfront as well.
  4. Be clear on how you will be covered. Make sure you understand how a specific policy will cover pre-existing medical conditions.

Common definitions of pre-existing medical conditions

In life insurance terms, a pre-existing condition is defined as any illness or injury that you have been receiving medical attention for over a prolonged period of time. Some conditions that fall into this category include, heart diseases, asthma and diabetes.

Life insurance companies have their own individual guidelines to determine if a condition should be classified as pre-existing. Some examples of rules insurers use include:

  • Not a pre-existing condition due to successful treatment. Most life insurers will consider a condition not pre-existing if it was treated successfully and requires no further exams or tests.
  • Not a pre-existing condition due to time. Some insurers may categorise a condition as not pre-existing if treatment has concluded for a certain period of time.
  • Total pre-existing condition exclusion. A life insurance term that means all pre-existing conditions are automatically excluded, no matter how much time has elapsed since you last required treatment.

When applying for life insurance you are required to disclose details of any pre-existing conditions at the time of application. Failure to do so may result in your claim being rejected.

Can I get life insurance if I have a pre-existing medical condition?

As mentioned previously, different life insurers will have their own sets of conditions governing the treatment of pre-existing medical conditions. Generally, there will be:

  • A set of conditions that the insurer will automatically cover.
  • A set of conditions that will require further information around the nature of the condition and current treatment being received.
  • A set of conditions that will be automatically excluded by the provider.

Based on the conditions above, an insurer is likely to either:

  • Accept the application and apply a premium loading.
  • Accept the application and exclude certain conditions from cover.
  • Reject the policy application.

If it is not clear from the information on the insurance providers website or in their product disclosure statement (PDS) how your condition will be treated, it is always best to contact the insurer directly to clarify where your condition falls before submitting your application.

What information do insurers use to review policy applications?

An insurance provider may request the following details while assessing your application to decide whether to provide cover:

      • Family medical history. Details of any medical conditions suffered by immediate family (e.g. mother, father and siblings) including mental disorders, diabetes, cancers and heart disease.
      • Medical history. Details of any medical examination, consultations, procedures or medications (including stimulants or sedatives taken within the last five years).
      • Lifestyle. Whether you are a smoker, have a history of alcohol abuse or are currently taking any prescription or non-prescription drugs.
  • Your occupation. The profession you work in, the hours, your title and the size of the company you are employed by are all important factors for insurers.
  • Your financial situation. Your insurer will want to make sure that they are not over or underinsuring you and that you will be able to keep up with the required premium repayments.
  • Your participation in hazardous pursuits. Insurers may take into account your participation in hazardous pursuits, such as skydiving or mountaineering, as well as your level of competency in this activities.

If you are not sure of any of the details listed above, you should contact the relevant people to clarify or obtain the necessary information.

What happens if I fail to disclose a pre-existing condition?

In the event of a claim, an insurance provider will take rigorous steps to review the policyholders medical history and contact medical professionals that the claimant had consulted with, or been treated by over the years.

If it is found that the claimant did not disclose details about their, or an immediate family members medical history, the claim may be rejected if the condition is found to have impacted the claim. According to ASIC Report REP 498 Life insurance claims: An industry review, 2016, about five percent of claim disputes in Australia are caused by non-disclosure of health related information.

Debunking life insurance myths about pre-existing conditions

There are some common myths surrounding the treatment of pre-existing conditions by life insurance providers that has mislead people into thinking they cannot get cover. Some of the common ones include:

      • I am uninsurable. This is the biggest and most popular myth of them all. People who have had pre-existing conditions are led to believe that if you have diabetes or heart disease, you cannot obtain life insurance. However, the insurance industry is continuously developing its products in order to meet the different demands of their clients.
      • I have a special condition that is uninsurable. Here’s a fact – insurance providers may offer similar insurance products, but that does not mean that they have similar features, cover, and limitations. If your medical condition is rejected by one insurer, it does not mean that other providers will do the same. A large number of insurance companies now exist in Australia that specialise in providing life insurance for people with high-risk jobs and/or pre-existing conditions.
      • I need to undergo a rigorous medical examination. Another myth that causes a lot of people to shy away from getting life insurance. Just thinking about the series of medical tests you have to go through is enough to discourage even the healthiest person. However, if you have had a previous health condition but you see your doctor regularly, take the prescribed medication properly, and have your doctor’s medical report to attest to that, you don’t need to subject yourself to another medical exam.

Steps for choosing a life insurance provider?

    • Identify what type of cover you need. Before shopping around, it helps when you sit down first and list the things you want included in a policy. This includes the type of policy and the length of cover you need since this will affect the cost of your premiums.
    • Weigh up your options. Don't limit yourself to one provider and take the time to see what is available on the market.
    • Get professional help. If you are having difficulty sorting through the different policies, you can always engage the services of an insurance adviser. These specialists are able to access a large network of insurers and offer you policy options and quotes tailored to your requirements.
    • Be honest when applying: It is important to take the necessary steps that are prescribed by your insurance provider during the application process. Provide all necessary documentation and answer all questions related to your condition as truthfully as you can.

Any policy clauses to be aware of if I have a pre-existing condition?

There are some key components of your policy to look out for if you have a pre-existing medical condition and are looking to take out cover. This includes:

      • Any exclusions and restrictions: This is a very important area to look at if you have previous health conditions, as you need to see whether there are any restrictions with regards to the cover based on your previous health conditions. Your condition may be automatically covered or you may need to undertake additional underwriting.
      • The cost of the cover: Depending on the previous health conditions that you have suffered from, the cost of your life insurance cover can increase dramatically due to premium loading. In order to get the best deal possible you need to make sure you compare quotes from a number of insurance providers.

Compare quotes for life insurance if you have a pre-existing condition

* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking financial advice and consider your personal financial circumstances when comparing products.

Picture: Shutterstock

Richard Laycock

Richard is the senior insurance writer at finder.com.au and is on a mission to make insurance easier to understand.

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