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If you want peace of mind knowing that your family will be financially covered in the event of your passing, then a life insurance policy is something that you should seriously consider. And the younger and healthier you are, the lower your premium rates will be. But what if you suffer from a pre-existing medical condition?

Having a health condition can certainly make applying for a life insurance policy much more complicated. But can you still get approved for a policy?

Are You Eligible For Life Insurance If You Have A Pre-Existing Condition?

Despite having a pre-existing condition, you should still be able to get a life insurance policy. That said, you may either only qualify for a limited amount of coverage, or you may be charged higher premiums as a result, depending on your particular condition and prognosis.

Getting approved for life insurance is not always a guarantee, especially if you are much older when you apply for a policy and have a serious medical condition that will significantly shorten your life.

Depending on the specific type of pre-existing medical condition, you may only qualify after a certain amount of time has elapsed since the date that you’ve recovered from your condition, if applicable. In this case, you may qualify for a “rated” policy, which carries a higher premium and may require a medical exam before approval to make sure you don’t have any other medical issues.

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Types Of Illnesses That Affect Life Insurance

Several pre-existing medical conditions can impact the rates you will be charged for a policy and the type of coverage you can get, such as the following:

  • AIDS 
  • Alzheimer’s disease 
  • Aneurysm 
  • Angina
  • Anorexia/bulimia
  • Cancer 
  • Cerebral palsy
  • Cystic fibrosis
  • Dementia
  • Drug/alcohol abuse 
  • Heart disease
  • Hepatitis 
  • Kidney disease
  • Liver disease
  • Multiple sclerosis
  • Muscular dystrophy
  • Parkinson’s disease
  • Spina bifida
  • Stroke 

This list is by no means exhaustive. There are several ailments that a life insurance provider will seriously consider before issuing a life insurance policy. The conditions mentioned above are meant to give you an idea of the types of medical issues that can impact your health insurance policy and the price you pay for it. 

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Why Do Pre-Existing Conditions Affect Life Insurance Premiums? 

When it comes to life insurance and the premiums charged, it all comes down to the amount of risk that the insurance company assumes when taking on a client. If you are seen as a higher-risk individual, your premiums will likely be more expensive. Insurance providers charge more in premiums to offset the risk they take on. 

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If the chances of your life being cut short are very high, the insurance provider risks losing out. They are in the business to make a profit, but if they must pay out a large death benefit after only a few short years of receiving premium payments from you, their profits will suffer. To make up for the risk, they typically charge a higher rate for high-risk clients. 

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Many things can increase this risk factor, including pre-existing conditions that can shorten a person’s lifespan. Other risk factors include the following:

  • Age – The older you are when you take out a life insurance policy, the more you will be charged in premiums.
  • Lifestyle – If you regularly partake in dangerous hobbies — like skydiving or car racing — you’d be seen as a risk to an insurance provider.
  • Smoking – Your health can be significantly impacted by smoking, which will increase your premiums.
  • Occupation – A dangerous job can impact your premium rates.
  • Gender – Men tend to engage in riskier behaviours compared to women and are sometimes charged a little more in premiums as a result.
  • Family history of health conditions – Even if you don’t currently suffer from any major health issues, you might still be seen as a potential risk if you have a family history of certain serious medical conditions, like heart disease or cancer.

At the end of the day, your ability to secure a life insurance policy, and the premiums you are charged if you are approved, all come down to risk. 

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Best Types of Life Insurances For Canadians With Pre-Existing Conditions 

As mentioned, having a pre-existing medical condition doesn’t necessarily mean you’ll be turned down for a policy. That said, there are specific types of policies you may want to consider if you are currently battling a chronic health condition, even if you’re quoted a higher premium:

Guaranteed Acceptance Life Insurance

As the name suggests, a guaranteed acceptance life insurance policy assures acceptance, as long as you fall within a certain age range. You won’t be required to undergo a medical exam or fill out a lengthy questionnaire about your health to qualify. This is a huge plus for anyone who suffers from a pre-existing medical condition.

But in exchange for this guaranteed acceptance, your premiums will be much higher than they would be for a healthy person with a standard policy. You may also not qualify for as much coverage. Many guaranteed acceptance life insurance policies limit the death benefit to somewhere around $25,000. 

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Tailored Life Insurance

Some insurance providers offer life insurance plans that are designed especially for those with certain medical conditions. For example, there may be plans that are specific to patients suffering from diabetes, HIV, or heart disease. Not all insurance providers offer these types of specialized plans, so you will have to inquire with your particular insurer to see what they have to offer.

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Group Life Insurance

If you are employed, you can purchase group life insurance with your employer, even if you have a health issue. While you might be limited in coverage, you won’t have to take a medical test to be eligible. Just keep in mind that this coverage could end if you leave the company at some point.

Tips on Life Insurance For Pre-Existing Conditions

If you have a pre-existing medical condition but are still looking for coverage, consider the following tips when shopping for a policy:

Consider Waiting Until Your Condition Has Improved

As mentioned earlier, you may need to wait until a certain time has passed since you’ve recovered from your ailment, depending on what your medical condition was. Insurance companies could deny your application if you apply right after being diagnosed with a serious medical issue. 

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Ask For A Medical Exam If Your Health Has Improved

If you’ve already been accepted for a policy but are paying high premiums as a result of your condition, request a medical exam if your health has improved since you first applied. This may translate into lower premiums.

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Use An Insurance Broker

Rather than dealing with an insurance agent who is affiliated with one company, consider using a broker. These professionals are independent insurance experts who can shop around on your behalf to find an insurance agency that can offer you the appropriate amount of coverage you need at a price point you’re comfortable with. Most importantly, a broker can help you find an insurance provider that’s willing to work with your pre-existing medical condition.

Be Honest

Don’t lie about your medical condition when you apply for a life insurance policy. If your life insurance company finds out — which they likely will — your policy can be nullified and your death benefit will never be paid out to your beneficiaries. It’s always best to be upfront about any medical conditions you may have.

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Final Thoughts

The best time to apply for a life insurance policy is when you’re young and healthy. This will increase your chances of getting approved for plenty of coverage at an affordable premium rate. If you suffer from a pre-existing condition, you may still get approved. Just keep in mind that your premiums may be higher and coverage may be limited. But by working with an insurance broker, you’ll increase your chances of finding an insurer who is willing to work with your condition and offer you a policy and premiums you can afford.

Caitlin Wood, BA avatar on Loans Canada
Caitlin Wood, BA

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

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