Life Insurance and Pre Existing Medical Conditions Myths

Thought it wasn't possible to get life insurance with a pre-existing condition? Think again.

There’s a commonly held misconception that it’s not possible to take out life insurance if you have a pre-existing medical condition. While it can sometimes be more difficult for those with pre-existing conditions to find cover, many insurance providers continue to improve their underwriting process and product offerings, making it possible for those people to take out the life insurance cover they need.

Each insurance provider has a list of pre-existing medical conditions that they will provide cover for, while each provider can also adjust their policies through exclusions or premium loadings to account for your particular condition. However, if you have a pre-existing medical condition and are seeking life insurance cover, it’s important that you are aware which conditions will not be automatically covered before you start applying for insurance.

5 myths about getting life insurance if you have an existing condition

  • I won’t be able to get insurance cover. This is perhaps the most common misconception about pre-existing medical conditions. However, as stated, it is possible for people with pre-existing conditions to take out life insurance. The insurance industry is continuously developing its products to be able to offer insurance to more customers, so don’t be disheartened if you have a less than ideal medical history.
  • My particular condition is uninsurable. Policy features and cover limits differ between providers. Just because one insurance company excludes your condition doesn’t mean that all other companies will do the same. Some providers even specialise in offering insurance to high-risk clients, while others let you tailor cover to suit your needs, so it pays to shop around to find the best deal for you.
  • Everyone must undertake a rigorous medical exam. This widely believed myth discourages many people from applying for life insurance and can often make the whole process seem daunting and like too much of a hassle. However, the fact is that this is not necessarily the case. If you have a pre-existing medical condition and you consult your doctor regularly, take any prescribed medication, follow all medical advice and have a report from your doctor certifying this, you won’t need to endure another medical exam.
  • I don’t need to tell my insurer about a condition that occurred a long time ago. Many people assume that they don’t need to notify their insurance provider about a medical condition they were diagnosed with or that occurred a long time ago. However, it’s essential that you make your provider aware of any condition that may affect your application. If you don’t disclose all your conditions to your insurer, you won’t be able to make a claim. Be upfront and honest about all aspects of your medical history.
  • Life insurance cover is too expensive. Many people are surprised to discover just how affordable life insurance actually is. You might’ve heard the old cliché that it can cost less than a cup of coffee a day, yet life insurance offers you far greater financial security and peace of mind than simply putting your money in a savings account. Compare a few online life insurance quotes to see just how affordable this type of cover can actually be.

What happens if I don’t tell my insurer about my pre-existing medical condition?

Neglecting to let your insurer know about your condition to avoid any increase in premium can have devastating impacts further down the track. As part of their duty of disclosure, each applicant is required to let their insurer know of any factor that may impact the insurers underwriting of their policy. This is known as the duty of disclosure.

In the event that a claim is made, insurers go to great lengths to ensure that the claim was not a result of any known conditions that should have been made clear during the application. If it is found that information was withheld during application, the insurer will reject the claim and there will be no payment made or refund of any premium payments. Every year hundreds of people are left to bear the burden of great financial loss after failing to adequately examine the conditions of their policy and let their insurer know of existing conditions and other factors.

Tips to find life insurance with cover for pre-existing medical conditions

  • Deal with an experienced insurance agent. This is a vital piece of advice. Find an agent who has experience in finding insurance cover for high-risk clients, and who will be able to offer tailored advice to match your individual needs. Your agent will know which insurance providers will be most likely to offer cover, and can help you get the right level of insurance.
  • Gather all your supporting documentation. It’s a good idea to do this before you even apply for cover. Go through your records and gather all the information you can pertaining to your pre-existing medical condition. Include details such as which doctors have treated you, exact dosages of medication, and other treatments you have undergone. Keep multiple copies of everything and make sure not to leave anything out; full disclosure is a must when applying for life insurance.
  • Create a health summary. Including a report summarising your overall health is also a good idea. Be upfront about everything, but remember to focus on the successful treatment or control of any conditions. If you go for regular check-ups, stick to a treatment plan and always follow medical advice, this will weigh in your favour. Also remember to emphasise the positive aspects of your health—for example if you’re a non-smoker, or if you jog every day to keep fit.
  • Compare a number of policies. Don’t simply apply for the first life insurance policy you come across. Instead, take the time to compare a number of different policies and see how they measure up. Check the exclusions and limits of different policies, and make sure you know exactly what’s covered and what isn’t. Factor the premium price into your calculations to get a better idea of the true value of your insurance.

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William Eve

Will is a personal finance writer for finder.com.au specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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