More on Life Insurance
More on Life Insurance
Type 1 diabetics often pay more expensive life insurance premiums, depending on the severity and treatment of their condition.
Updated April 19, 2021|5 min read
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If you have type 1 diabetes, shopping for life insurance is more complicated and coverage will be more expensive. But as with other pre-existing medical conditions, you can still get coverage depending on the severity and treatment.
Type 1 diabetes is a condition where you can’t produce any insulin naturally. It has no known cure and can develop at any age, though it is usually diagnosed in children, teens, and young adults. Because it’s less common than type 2 diabetes, insurance companies charge type 1 diabetics more than type 2 diabetics; some won’t insure you at all.
While not all insurers work with type 1 diabetics, certain companies, such as Banner and Prudential, offer applicants with type 1 diabetes reasonable coverage. Insurance companies will also look at your age, the severity of your diabetes, and your treatment plan when determining your insurability and premium rates. Shopping around with an insurance agent is the best way to find an insurer that will work with you based on your health profile.
Type 1 diabetics receive higher premium rates than type 2 diabetics
If your diabetes is well-managed, with favorable A1c/blood sugar levels and no significant kidney or liver problems, it’s possible to get life insurance
Severe cases of type 1 diabetes could lead to an application denial or a lower health classification
Final expense life insurance and group life insurance are options for people with severe type 1 diabetes
The cost of life insurance premiums is determined by several factors, including your age and health. Generally, the younger and healthier you are, the lower your rates will be, while certain medical conditions — including type 1 diabetes — raise the price of premiums. If your condition is severe enough, it can disqualify you from getting coverage altogether.
During underwriting, life insurance companies set your premiums based on the likelihood that you will pass away before the term expires. To evaluate that risk, insurers use a classification system (ranging from Preferred Plus to Substandard ), which determines how much you pay for your coverage.
People with type 1 diabetes usually don’t qualify for a rating above Substandard. Substandard ratings aren’t a specific rating classification like the others; instead, you’re placed in what’s called a table rating system, graded by either letters or numbers (typically either A-J or 1-10).
Your premium price will, on average, be the Standard price plus 25% for every step down the table:
A/1 = Standard + 25%
B/2 = Standard + 50%
C/3 = Standard + 75%
D/4 = Standard + 100%
E/5 = Standard + 125%
F/6 = Standard + 150%
G/7 = Standard + 175%
H/8 = Standard + 200%
I/9 = Standard + 225%
J/10 = Standard + 250%
If you have type 1 diabetes, you could be paying as much as 250% more on your premiums.
In addition to your overall health, insurance companies look at family medical history, hobbies, and tobacco use to decide your classification. If you have type 1 diabetes, you’ll still fall below a Standard rating, but it’s possible these other factors can help get you a better table rating.
Below are sample average rates for a $500,000, 20-year term policy for a male applicant with a Standard health classification compared to a Table 5 health classification, which is more common for type 1 diabetics.
|Age of applicant||Standard||Table 5|
You can see stark increases between a Standard and Table 5 rating premium. If you have type 1 diabetes, you could receive a health classification below Table 5 too.
If your blood sugar levels are well managed (as evidenced by HbA1c test results), you can still get life insurance coverage. By applying for life insurance at a younger age and paying premiums annually instead of monthly, you can also save money on premiums.
Having type 1 diabetes makes life insurance premiums more expensive than if you have type 2 diabetes or no diabetes, based on quotes provided by Policygenius partner insurers in 2021. Because type 2 diabetes can be reversed with certain treatments or medications, insurance companies view it as a more manageable condition. Type 1 diabetes is also rarer than type 2 diabetes, which accounts for 90-95% of cases in the U.S.
The younger you are at the time of your diabetes diagnosis, the less favorable your life insurance health classification will be.
While having type 1 diabetes will likely mean a less favorable health classification assignment, it’s important to compare quotes from different insurance companies because some insurers might offer you more favorable rates than others.
Traditional underwriting includes an application, phone interview, and medical exam. If you have type 1 diabetes, the underwriter will also request an additional attending physician statement (APS ) from your doctor to get a better picture of your overall health.
An APS is a standard summary of your medical history that includes descriptions of your health and a checklist of medical conditions the insurer needs to know. It’s typically required if you have any history of chronic medical conditions.
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If you are denied traditional life insurance coverage because you have a severe case of type 1 diabetes, there are other ways to get the financial protection you need for your loved ones.
Guaranteed issue life insurance is great for high-risk individuals with severe type 1 diabetes. As long as you do not have a terminal illness, you’re likely to be approved for coverage. However, it’s more expensive than simplified issue whole life insurance and offers lower maximum coverage amounts, typically at or below $25,000.
Simplified issue life insurance is a type of whole life insurance that is good for people who don’t qualify for a fully underwritten life insurance policy but are only considered moderate risk. Eligibility depends on how severe your type 1 diabetes is, so coverage is not a guarantee. You’ll have to answer a detailed medical questionnaire, but there’s no medical exam involved. This is your best bet for getting an affordable life insurance policy with coverage up to $50,000.
Some employers offer group life insurance as an employee benefit. Your coverage depends on your employment status. Your employer pays most or all of the premium costs, so if you lose your job or switch companies, you’ll no longer be insured.
Group life insurance offered by employers does not typically require traditional underwriting, so it’s available even if you have pre-existing conditions like type 1 diabetes. Employer sponsored life insurance policies don’t provide enough coverage to fully protect your family if you die, but it’s better than having no coverage at all, so we recommend taking advantage of this perk if it’s available.
Due to the ever-changing nature of the coronavirus pandemic, some insurers are modifying processes and/or imposing coverage restrictions on certain health conditions or age groups. Speak to a Policygenius agent for free to find out how to get the most affordable policy.
If you have type 1 diabetes and it is well-managed, you can get approved for life insurance coverage by some insurers. But if you have a more severe case or have other health complications due to your type 1 diabetes, you may be declined for traditional life insurance.
Term life insurance and permanent life insurance policies are available to type 1 diabetics. If you don’t get approved due to the severity of your condition, final expense life insurance and group life insurance are other options available.
Insurance companies base premium rates on several factors, including health. Type 1 diabetes is considered a serious chronic medical condition, so you’ll pay more than someone who has type 2 diabetes or doesn’t have diabetes at all.