Life Insurance with a pre-existing medical condition, what you need to know.
Are you concerned about applying for life insurance because you have a pre-existing condition? You shouldn't be.
While you may not be able to get cover with every insurance brand in the market, there are options available to you.
Keep reading to find out all you need to know pre-existing conditions, acceptance criteria from the brands in our panel, how existing conditions are classified and assessed, what your rights are if you're denied cover and more information you need to know when applying for life insurance for pre-existing conditions.
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- Health and life insurance
- Which providers will offer life insurance to people with pre-existing conditions?
- What is assessed during the underwriting process?
- Life insurance and medical screenings
- Looking for financial protection from medical events?
- Steps to getting cover if you have a pre-existing condition
When you're applying for life insurance, an insurer will calculate the premium you'll pay based on a number of risk factors. This process is known as the underwriting and one of the major considerations is your overall health.
Insurers take into account your family medical history, personal medical history and lifestyle habits when calculating your overall health and life expectancy. Going through the underwriting process at the outset of the policy may seem a little invasive but it will give you a better understanding of the terms and conditions, and more specifically, what's covered.
While there are life insurance policies available that don't require medical underwriting at the outset of a policy, there is an underwriting process if you make a claim.Back to top
During the underwriting process, your insurer will look at various life insurance risk factors, which can generally be broken down into eight risk groups:
- Your medical history. During your application for life insurance you should let your insurer know of any congenital problems, illnesses or diseases, injuries, psychological issues or any undiagnosed by ongoing symptoms.
- Your family medical history. Family history is an important indicator for ailments that are known to have familial links such as cancer, depression or congenital heart defects.
- Your lifestyle. You should inform your insurer if you're a smoker, drinker, or taking any prescription or non-prescription drugs.
- Your occupation. Your occupation, hours you work, your title, the size of the company you work for are all important factors for insurers.
- Your financial situation. Your insurer will want to make sure that the amount you're being insured for is both logical and that you will be able to keep up with the required premium repayments.
- Your participation in hazardous pursuits. Your participation in hazardous pursuits may be assessed depending on both the type of activity and your level of competency.
- Your location. Your insurer will look at your access to medical facilities and likelihood of natural disasters in the areas you work and live.
- Your present risk. Contemporary events are current risks that may pose an immediate threat such as civil unrest or natural disasters.
As part of your life insurance application you may be required to undergo medical screening. Medical screenings are particularly common among older applicants and for those wanting to cover a large sum. Based on your test results, your life insurance provider looks for indicators of diseases or illnesses such as:
- Heart disease. In Australia, coronary heart disease kills more people than any other disease and in 2013 accounted for 13% of all deaths in Australia (Heart Foundation). As part of your medical screening your blood pressure is used to determine your cholesterol level as high cholesterol is an indicator of coronary artery disease. Then, depending on your age and medical history, you may need to have an electrocardiogram to check for an irregular heartbeat.
- HIV. HIV is the virus that has the potential to become AIDS. If you have contracted HIV, antibodies or antigens will have developed in response to the virus and will be present in your blood.
- Diabetes. If you have chronic diabetes you are more likely to suffer a heart attack, kidney disease, stroke and many other health conditions. Your blood and urine may be tested for unusually high glucose levels, which can be an indicator that your body is not processing sugars properly.
- Kidney disease. Kidney disease can lead to kidney failure and if you don't receive dialysis or a transplant the disease can be fatal. Your blood will be checked for high levels of blood urea nitrogen and your urine for high levels of creatinine, protein and red blood cells.
- Liver disease. Liver disease can develop into live cancer, or cause gastrointestinal bleeding. Your blood will be screened as part of a life insurance assessment, for sighs of a high bilirubin level or elevated levels of the enzymes which normally appear in liver cells.
- Cancer. Some forms of cancer can be identified through blood and urine tests. Blood cancers such as leukaemia can be identified in your blood, and bladder or kidney cancer can be identified in your urine. The levels of prostate specific antigen can also indicate prostate cancer.
If your looking for additional protection that covers you in the event you suffer a serious medical condition, you may also want to consider trauma insurance. Trauma insurance provides a lump sum benefit if you suffer a condition listed on the policy. Some insurers offer cover for more than 50 conditions including:
Other conditions that may be covered include:
- Alzheimers disease
- Aortic surgery
- Aplastic anaemia
- Benign brain tumour
- Severe burns
- Chronic fatigue syndrome
- Crohn's disease
- Coronary artery angiography
- Coronary bypass surgery
- Crohn's disease
- Heart attack
- Heart conditions
- High blood pressure
- HIV accidental infection
- HIV occupational acquired
- Huntington's disease
- Kidney failure chronic
- Loss of limbs or eye
- Loss of speech
- Loss of independent existence
- Lou Gehrig's disease
- Lung disease
- Major head trauma
- Major organ transplant
- Mental illness
- Motor neurone disease
- Multiple sclerosis
- Musculoskeletal injuries
- Out of hospital cardiac arrest
- Parkinson's disease
- Peripheral neuropathy
- Pulmonary hypertension
- Sleep apnoea
- Terminal illness
If you do have a pre-existing condition in your medical or family history, don't be daunted by the medical screening life insurers conduct for diseases and health conditions. If you have a pre-existing condition when you apply for life insurance, follow these steps in your application for the greatest chance of success:
- Work with an experienced insurance broker
Look for an insurance broker who is experienced with impaired risk life insurance applications. If you have a pre-existing condition, you need to work with an insurance broker who has experience in securing insurance for high risk cases, and knows how to present your case to an insurer in a favourable light.
- Choose an insurer who specialises in pre-existing conditions
If you approach a standard insurer with an unusual application, you will usually be automatically charged extra for your coverage, or denied life insurance, because your situation is so far outside of what the insurer is equipped for and used to dealing with. However, if you can find an insurer who specialises in your particular condition, they will be able to assess your risk factors in a detailed way and give you the best value life insurance coverage.
- Organise your documents
Before you start any applications or sourcing any quotes, make sure you have all the information about your condition available. The more information you can provide to the insurer, the better equipped they will be to assess your risk factors. This ensures full disclosure with the insurer, providing all the names of the diseases or illnesses as well as the dates, medications taken and treatments conducted. Also make sure that specific doses of medications are also listed, as well as details of any medications you are still taking. You'll need to make sure you have a list of all the medical professionals who have treated you over the last seven to 10 years and this step can take some time to organise. However, in compiling an organised and professional folder of all of this information, and making several copies for distribution, you will show you have nothing to hide, and have a greater chance of success.
- Put together a summary of your health
As part of this file, write a summary of your health up to this point as this gives you a chance to highlight positive aspects of your lifestyle, for example, you never drink or you have never smoked, or gave up smoking 20 years ago. Also note aspects of your lifestyle such as jogging regularly, or that you go to the gym for an hour three times a week. Don't worry about including details of diseases you have recovered from as these are considered cured, and you will only need to detail information about diseases which are in remission, or those which are no longer producing symptoms even if you haven't been cured.
- Include details of any accidents
If there are long term effects of accidents you have been involved in, such as metal screws in your hip or a plate in your skull, include details of these.
- Increase your odds
You should be applying to at least three or four different insurers, because each will have their own underwriting process and criteria, and you are looking for aggressive and young underwriters who will take on your pre-existing condition.
- Prepare for medical exams
It is important that you agree to any medical tests the life insurance company asks for, to provide the most detailed information for your application. Ask that your exam be scheduled for early in the day when you are awake and alert, and avoid having caffeine or sugar for 12 hours before your medical.
Diseases and health conditions assessed for a life insurance policy will differ between providers so make sure you read the fine print on the inclusions and exclusions of cover, and understand all medical testing procedures for your assessment.Back to top
Medical tests are not required for all types of life insurance, although submitting to a test can mean lower premiums as the insurer can better tailor your coverage. This is because the insurer wants the most accurate information possible about your health, and blood tests and medical examinations can provide this information.
When applying for life insurance, you may undergo one of the following types of medical tests:
- A check up. This type of medical test can usually be undertaken at your own GP’s office or completed by a medical nurse. This check up will record your weight and height, and may include a blood pressure and urine test.
- A check up and a blood test. In this instance you have the same tests as above, but your doctor or nurse will also take some blood to see whether you are HIV positive, or if you have illnesses such as Hepatitis. The insurer may also request a cholesterol reading.
- Personal medical attendant report. This is a detailed medical history report completed by your regular GP, which is sent off to your insurer.
Applicants can take certain steps to prepare for their medical examination
- Organise appropriate documentation such as your driver’s license or passport to verify your identity
- Fast eight to 10 hours before your blood test
- Drink a glass or two of water before giving a urine sample, and try and refrain from drinking alcohol for 72 hours before the test, and avoid fatty foods 24 hours before
- If you take medications which contain paracetamol, you should avoid these for 24 to 48 hours before the test
The results of your examination are sent to your insurer, who then determines the outcome of your life insurance application. If your application is accepted then you will be sent a policy schedule to commence your coverage. If the policy is rejected based on your medical results, the insurer may offer you an alternative policy.
Applicants should remember that just because one insurer may not be willing to offer them cover, does not mean that they all will. Insurance providers often have different criteria for assessing applicants, with some policies tailored specifically to different buyers.Back to top
The Disability Discrimination Act of 1992 helps promote the rights of people with disabilities by regulating discrimination of theses people by life insurance companies. The act ensures that people with disabilities are able to gain coverage by making it unlawful for companies to discriminate people with disabilities during the underwriting process.
The act does acknowledge that some discrimination is likely to take place as is the nature of underwriting. There are instances where risks associated an individuals disability may be far too high for the insurer to accept the risk. Different providers have different criteria for assessing people with disabilities.Back to top
However, if you have previously undergone genetic testing to determine for your own peace of mind whether you carry a certain genetic disease, then you are required to disclose the results of those tests to your insurer. This can lead to opting out of a genetic test when a family member is diagnosed or dies from a certain disorder, for example parents whose child dies from muscular dystrophy for example, may refrain from having their other children tested so as not to jeopardise the surviving child's chances at obtaining life insurance when they have families of their own to protect.
Health insurer nib is the first in Australia to offer genetic testing as part of their medical screening process for life insurance. nib sent direct letters to 5,000 customers offering a discounted price for a genetic test so that they could be informed about their genetic risks, and take steps to improve their health behaviours. While life insurance policies cannot be adjusted after they have been approved, if these customers wanted to change or upgrade their policies, move to a different insurer or open a superannuation fund, they would have to disclose the results of these genetic tests.Back to top
Applying for life insurance when you have a pre-existing condition can be a daunting process, so your questions are answered here:
Q. Can you take out life insurance if you have a pre-existing condition?
- A. Yes, even if you have suffered a disease or disablement in the past, you can still apply for life insurance coverage for protection against a range of future events.
Q. What sorts of conditions can be covered by life insurance?
- A. The illnesses and disabilities covered under your life insurance policy will depend on your insurer, and will be detailed in full in your product disclosure statement.
Q. What does a life insurance medical exam involve?
- A. A medical exam can be as simple as checking your weight and blood pressure, or may also include a blood test, a urine test, or a cholesterol test.
Q. How should you apply for life insurance if you have a pre-existing condition?
- A. It can be useful to compare insurance companies and quotes online, but if you have a specific condition to include on your application, you will receive the most accurate prices and information by calling or visiting the insurer directly.
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