Applying for Life Insurance with a Pre-Existing Medical Condition
It is possible that some pre-existing health conditions can attract a higher life insurance premium rate or even be excluded from cover by some providers.
How can they affect your cover?
Depending on the condition and your insurance provider, it can cause your premiums to go up, or it can actually preclude you from coverage by certain providers. So, what is a pre-existing condition, and how do the companies determine what it means?
Definition of a Pre-Existing Medical Condition
A pre-existing condition is defined by any ailments, illness, injuries or conditions in which you are currently or have been treated for by a specialist prior to your application for life insurance. In the event that your death is caused by this condition, the claim may result in being held or declined.
Different insurance providers will look at various medical conditions in different ways. It is very important to provide the latest information on your health to your insurer and disclose any conditions that you may have. This is to enable your insurance provider to assess your application and determine whether or not they are able to provide you with cover.
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Different Treatment of Conditions by Insurance Providers
The major difference is in how the company will treat a condition, and when or if they consider it successfully treated. Once they consider it treated, they require no more tests or consultations with your doctor and/or specialists.
You may find providers who use a total pre-existing exclusion. These companies don’t care what has been done about your condition - if you have any condition on their list, you will be excluded from coverage even if it’s been 30 years since your last treatment and every doctor considers you cured and fully recovered.
Other insurers can be much more lenient. There are providers who will consider the pre-existing conditions that are successfully treated and cover you if your treatments and consults have ended anytime in the last five years, two years or even six months.
Finally, some insurers will assess each condition on a case by case basis to determine the level of risk the insured poses to them. The applicant may still have symptoms of the condition but it is controlled.Back to top
Importance of Understanding Policy Exclusions for Medical Conditions: An Example
Take a woman with breast cancer for example. She found out 20 years ago that she had breast cancer and she started all of her treatments. 12 years ago, her doctors cleared her, saying the treatments had gone well but that they would need to check occasionally to be sure. 7 years ago, she went to her final checkup. The doctor did the exam and concluded that her condition was cured and that treatment had been totally successful.
That woman is still going to pay very close attention to each individual provider’s definition of a pre-existing condition to ensure that she’ll be covered when she’s shopping for her life insurance. This same general rule will apply to anyone who’s had a pre-existing condition. Understanding the providers definition of a pre-existing condition could mean the difference between a successful claim or not being eligible to receive a payout.Back to top
Debunking the Myths on Pre-existing Medical Conditions
If you have a pre-existing medical condition, chances are you will be considered to carry a higher risk by many insurance providers, compared to a healthy person. However, common myths and misconceptions that exist concerning the relationship between pre-existing medical conditions and insurance are things of the past. Here are some of the most common misconceptions:
- I cannot get cover because of my pre-existing medical conditionThere was a time when getting cover was difficult, but as time goes by, insurance providers have come up with solutions to modify insurance policies to include cover for such situations. With these modifications come the ease and accessibility to get insurance cover.
- I cannot get cover for my specific type of illnessFrom its beginnings more than a hundred years ago, insurance has come a long way in giving cover to people like you who have pre-existing medical condition. Critical Illness insurance gives cover to a wide range of illnesses and diseases, such as cancer, stroke, and so much more. Moreover, it even pays you the benefit upon diagnosis of these illnesses.
- I will have to undergo an extensive medical check-upThis is another misconception that has kept many people from getting insurance and a major insurance buster. People think that they will have to undergo such rigorous check-up. There is a medical check-up indeed; however, contrary to what most believe, it only involves answering a series of questions about your personal and family health history, and a couple of tests, such as blood and urine tests. None are the complex medical procedures you have to face nor the countless tests often heard. More often than not, these hear says are from people who neither have insurance cover nor any concrete knowledge about insurance.
Pre-Existing Conditions that will Require a Medical Examination when You Apply for Life Insurance
When you fill in your life insurance application form, you will find a health questionnaire that you have to complete. You will be asked on whether or not you have certain conditions from a series of health conditions on the questionnaire. If you answer yes on any of the health conditions, you will generally be asked to provide more information and your insurance provider will then determine whether or not you need to go through a medical exam and if they will need supporting documents from your doctor.
There are certain medical conditions that will generally prompt your insurance provider to seek your medical history and request a health check-up at the time of underwriting. These include:
- Smoking habits: If you are a smoker, your insurance provider may ask you to complete a medical exam to uncover any underlying circulatory or respiratory disease, such as ischemic heart disease and chronic obstructive airways.
- Alcohol consumption: You will be required to undertake a medical exam and provide hospital reports if you are showing signs of alcohol abuse. Certain symptoms such as high blood pressure, pale complexions, finger clubbing, enlarged liver, a pitted nose and fine tremors are generally good indicators.
- High blood pressure: If you have hypertension, an underwriter will want know whether it is untreated, unresponsive to treatment or if it is malignant. An exam and further medical evidence will generally be required.
- Heart disease and heart attacks: For applicants with a history of heart disease or heart attacks, extensive check-ups will be required and generally a heavy premium loading is applicable.
- Chest pains: When you disclose signs of chest pains, an underwriter will investigate further reasons for these and whether they may be caused by an undetected or developing condition.
- Lung disorders: Asthma sufferers will generally have to provide a medical attendant's report for the insurer to further determine the severity of the condition. Full medical examination will be requested if you have had attacks in the past three years.
- Bronchitis: Chronic bronchitis often affects heavy smokers and for this reason, a medical exam and medical attendant's report will generally be required.
- Chronic indigestion: Any pain or discomfort associated with digestion may be symptoms of organic disease, and a medical report will generally be requested.
- Diabetes type I and type II: Both type I and type II diabetes sufferers will be asked to complete a medical exam and provide a medical attendant's report.
- Malignant tumours or cancer: A medical exam, full medical report and a questionnaire will be requested to enable the underwriter in finding reliable information when assessing the type of tumour and its staging.
- Kidney, bladder, and liver disorders:
- Hepatitis: If you have hepatitis, extensive investigations will be carried out to uncover the severity of your condition.
- Mental illness: A mental illness is often quite difficult to assess due to various forms of occurrences and severity. An underwriter will always ask for a full medical attendant's report for information on treatments, response to treatment and any attempts of suicide.
Importance of Declaring Medical Conditions During Application
Anyone looking to take out any form of protective cover is required to declare any known information that may impact an insurers underwriting of their application. In the event of a claim, an insurers underwriting division will take rigorous checks to ensure that the policyholder did not withhold any information around their health or lifestyle that may have been a contributing factor to their claim. This is known as the applicants "Duty of Disclosure" and is governed under Section 21(1) of the Insurance Contracts Act (1984).
If through the insurers investigation into the claimants medical history it is found that a claimant is found to have lied about their condition at time of application, their policy will become void and they will be forced to repay any payment associated with their claim.Back to top
Conclusion: Consider a Range of Options to Find Appropriate Cover
Getting life insurance cover for yourself nowadays even with a pre-existing medical condition is not impossible. All you need to do is know where to find a good deal, gather the information you need, compare policies, and decide which fits you best. Before you know it, you are saved from the stress about your finances and future should anything unexpected happen to you. Australians are fortunate to have such a diverse range of products available to them from different types of insurance providers. Take the time to weigh up the different options and if necessary, consider finding your policy through a consultant. They will be aware of what providers are most likely to offer cover for your condition and can hunt out premium discounts through a broad comparison of the market.