Life insurance and chronic illness

Shopping for life insurance when you're living with a chronic illness.

Logan Sachon

Logan Sachon

Published August 31, 2018

When it comes to buying life insurance, a lot of people with chronic illnesses or pre-existing conditions get nervous about qualifying for coverage, passing the medical exam or being able to afford the premiums.

But getting life insurance with a chronic illness is not impossible. In fact, depending on your specific medical history and pre-existing conditions, you may even get cheaper rates than you initially expected.

Policygenius can help you understand what insurance companies look at your health history, and which life insurance companies are best for people with a chronic illness.

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The best type of life insurance for people with chronic illness

The first point of action when applying for life insurance with a chronic illness to decide what kind of life insurance to apply for. There are many types of life insurance, but for most people, it’s a decision between two main products:

  • Term life insurance is pure life insurance. The policy lasts for a set number of years during which you pay premiums to keep the policy active. If you die during that period, your beneficiaries get the agreed-upon death benefit.

  • Whole life insurance is a type of permanent life insurance that combines life insurance and an investment component. Instead of lasting for a set period, whole life insurance lasts until you die, but you have to pay premiums that entire time — and those premiums can be six to ten times as expensive as term life. Whole life is generally only a good option for people with very specific financial goals, usually regarding estate planning. You can read more about term life insurance versus whole life insurance, but the important thing to know is that term life insurance is the right type of life insurance for most people.

If you are living with a chronic illness and shopping for life insurance, term life insurance is mostly like the right product for you.

How chronic illness affects life insurance coverage

When you apply for life insurance, your application goes through a process called underwriting — the carrier uses its own algorithms and data to decide, based on your health history, hobbies and more, how risky it is to insure you.

The result of underwriting is that you’ll be put in a health classification, and your premium rates will be based which class you’re in.

There are four different health classifications:

  • Preferred Plus (lowest premiums)
  • Preferred
  • Standard Plus
  • Standard (highest premiums)

If your health history is especially complex, you may be placed in a Substandard category, which means you’ll be quoted from a table based on your health profile.

Every life insurance company has its own set of underwriting guidelines to decide which health classification you fall into. So while you may be designated Preferred at one carrier, you could be Preferred Plus at another.

The differences in underwriting guidelines is why it’s important to choose the right carrier to apply to. (You technically can apply to more than one carrier at once, but the insurance companies don’t like it and it can delay your applications.)

The best way to apply for life insurance is to use an independent broker who is familiar with the underwriting guidelines at multiple carriers and can recommend the carrier most likely to give you the best health classification — and the best rate.

You can get started by getting quotes from Policygenius.


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The best life insurance companies for people with chronic illness

There is no one best life insurance company for people living with chronic illness, but there are some insurers that are more forgiving of certain health conditions than others.

Among the best life insurance companies, there are different rankings for applicants with certain pre-existing medical conditions and chronic illnesses.

Read more about the best life insurance companies for people with certain chronic illnesses:

These pages are a starting point — while one carrier might have the best rates for people with diabetes, another carrier might have the best rates for people with diabetes and a family history of cancer.

A Policygenius agent can recommend the best carrier for your based on your unique health history.

Life insurance riders and chronic illness

Once you have chosen a life insurance policy, it is possible to add riders or endorsements to personalize your coverage and make it work for you even while you’re still alive.

Many policies offer one or more accelerated death benefits riders, also known as living benefits riders. These allow you to access some of your life insurance death benefit while you are still alive if you are diagnosed with a qualifying health condition while your policy is active.

There are a few types:

  • Terminal illness accelerated death benefit rider. Provides benefits if you’ve been diagnosed a terminal illness with less than 6 to 12 months to live. Most insurers include this rider as part of their policies and refer to it simply as an accelerated benefits rider.

  • Critical illness accelerated death benefit rider. Provides benefits if you are diagnosed with one of the rider’s listed critical illnesses: examples include ALS, kidney failure, life-threatening cancer, major organ failure, heart attack and stroke. Only offered by some insurance companies, may or may not have an additional cost.

  • Chronic illness accelerated death benefit rider. Provides benefits if you are no longer able to perform at least two of the six Activities of Daily Living (ADL). These include eating, bathing, getting dressed, toileting, transferring and continence. These riders require the impairment to be permanent. Only offered by some insurance companies, may or may not have an additional cost.

  • Long-term care (LTC) rider. Provides benefits if you are no longer able to perform at least two of the six Activities of Daily Living (ADL), either temporarily or permanently. LTC riders generally provide benefits under the reimbursement model, meaning they pay for your monthly long-term care expenses. Many LTC riders offer residual benefits in excess of your death benefit (meaning, even if you spend your entire death benefit paying for your nursing home, they’ll keep paying). LTC riders require underwriting and may not be available to applicants with substandard health ratings. Often have an additional cost.

Read more about life insurance riders.

Alternatives to term life insurance when you have chronic illness

Sometimes, your particular medical history may mean that you cannot get a regular term life insurance policy. But again — it’s really impossible to know until you apply or talk to a licensed insurance agent.

If you are declined for a term life policy, you aren’t out of options. There are some life insurance products that skip the medical exam, making it much easier for people with complicated health histories to qualify. The two big ones:

Both simplified issue and guaranteed issue policies have higher premium and lower benefit amounts than term life insurance. But for people with particularly complicated medical histories, these products may still be able to offer you some protection.

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