What you need to know
Whether or not you can get life or income protection cover for chronic conditions depends on the illness you have, how severe it is and the degree to which it is under control.
Life insurers differ in what they will cover – it may cost you more to get insurance for a chronic condition, or your illness may be excluded from a policy.
If you are struggling to find cover, options you might consider include auto-acceptance policies and top-tier health insurance.
Chronic conditions affect more than 3 million Australians, many of who deal with persistent pain issues. If you suffer from a chronic condition, life insurance is important to consider.
But just as chronic illnesses vary a great deal, there's little consensus among insurers when it comes to who can get cover. Learn about your insurance options if you have a chronic illness.
What exactly is a chronic condition?
A chronic condition is an ongoing illness that has been present for longer than the usual healing time – or is expected to last longer than a set time period, such as 6 months – after diagnosis. Chronic illnesses often require continuous medical care.
Many ailments could be classified as chronic. Arthritis, lupus, kidney or liver disease, sleep apnea, diabetes and long COVID are all types of chronic conditions. Other common types include joint pain, swollen glands, fatigue, skin problems and digestive issues.
Chronic conditions: Key stats
Figures from the Australian Bureau of Statistics (ABS), released in March 2022, show the extent of Australia's challenges with chronic conditions. The ABS found:
- Nearly half of Australians had at least 1 chronic condition (46.6%, or 11.6 million people)
- Almost one in five (18.6%) had 2 or more chronic conditions
- Mental and behavioural conditions (20.1%) make up one-fifth of conditions. Back problems (15.7%) and Arthritis (12.5%) were the next most common chronic conditions.
The research also found that women – who usually have to pay more for income protection and trauma insurance – were more likely than men to have one or more chronic conditions (56.5% compared to 49.5%).
Pre-existing conditions and insurance
From an insurer's viewpoint, a pre-existing medical condition is one you either have or have had prior to buying life insurance. In other words, the illness may have been resolved or is still ongoing. Such conditions will typically have been diagnosed or investigated by a medical practitioner in the past.
Pre-existing conditions are dealt with by an insurer on a case-by-case basis. It is possible to get insurance cover with a pre-existing medical condition – though it could cost you more, or an exclusion may be applied. You won't be able to claim against any exclusions stated in your policy.
Common policy exclusions
Finder reviewed 5 Product Disclosure Statements for both direct life insurance
and income protection insurance. We found no explicit mention of covers for ongoing or long-term chronic conditions. Common policy exclusions included Chronic Fatigue Syndrome and mental illness.
Insurance expert Phil Thompson said it was tricky for insurers to work out whether to offer cover to people with pre-existing conditions.
"It's hard to quantify the risk that medical history poses to the likelihood of claiming," Thompson explained. "If you've got cancer, an insurer isn't going to charge you twice as much if your risk of claiming on a life insurance policy is 20 times greater. And that [is why insurance] becomes unaffordable."
According to Thompson, one option people have is to chat about their medical history with an insurer prior to submitting an application.
Thompson, who is director of an insurance-only financial advice company said that seeking the help of a financial adviser was his top tip.
"An adviser who does that work up front, who assesses your health history and tailors the application, [offers] the easiest way to reduce the likelihood of getting declined."
It's really important that applicants are completely truthful and accurate about any conditions when applying for cover.
Thompson added: "The insurer is either going to find out when you apply, or when you try and claim. This can leave you with a policy that's void and essentially worthless."
Ongoing pain issues? Talk to your GP
If you're worried about chronic pain, it's best to speak with your GP first. They should be able to provide you with information as well as a referral to a pain management programme at a pain clinic. Other options you could consider include checking your eligibility for NDIS payments. You could also join groups on social media for support with your specific illness. Finally, the government has launched a national action plan for pain management
Insurance options to consider with chronic conditions: A summary
Look for insurance offering pre-assessment
By taking an initial health assessment, you could tailor your next application to an insurer who may offer you suitable insurance for your needs.
Insurer NobleOak, which offers fully-underwritten policies, told Finder they set a pre-screening questionnaire prior to the full lodgement of an application. Further pre-assessment stages can include a medical exam, which NobleOak usually covers the costs for.
Alternatively, you could financial adviser or broker who can help you to undertake an initial health assessment, which includes asking medical questions up-front.
Financial literacy advocate Pascale Heylar-Moray told Finder: "It's worth consulting a financial adviser for a detailed assessment of the type of cover you need. While it may be confronting to walk through potential 'what if' scenarios around illness, disability and death, it's absolutely a worthwhile investment of your time and helps provide a safety net – both financially, and mentally."
Check if you hold any auto-acceptance cover
While many look to their super funds for cover, generally it's not going to offer the most comprehensive insurance, as our guide to superannuation life insurance explains.
That being said, there are super providers who offer auto-acceptance policies. In other words, you'll have been provided with a certain level of insurance. Importantly, this does not mean your medical condition will be covered. However, depending on the policy terms, you may be included for cover for a pre-existing condition if you've held insurance for a certain time period, such as 3 or 5 years and you've not previously claimed during the waiting period.
Start by reviewing any income protection or disability covers you may already hold. You can do this by calling your super fund or logging into your account online.
Get comprehensive health insurance
To help with the cost of any future hospital care for chronic conditions, you could take out a comprehensive health policy (which can start from around $35 per week). For example, gold-level hospital cover. Policies usually come with a 2-month waiting period, or 12 months if your chronic pain is a pre-existing condition.
Also, you may need extras cover to help cover the costs of ancillary health services to help with the day-to-day management of chronic pain. Extras policies can help with the cost of services such as physiotherapy, remedial massage and natural therapies.
Consider other insurances
According to the Australian Institute of Health and Welfare, chronic conditions contribute to nearly 9 in 10 deaths (89%), underscoring how common and serious these illnesses can become. If you're unable to secure other types of insurance cover, you could look into funeral insurance so that you have cover for your final expenses if the worst happens.