Visit any personal finance site and chances are, you’ll find an article on how buying life insurance young will save you money (we even have that article). So, you’ve finally decided to listen and get life insurance, BUT the next biggest question is: will I even qualify based on my health?
For those who’ve never had anything more than the flu, chances are, yes, you’ll have no problem getting life insurance. Congrats! This question isn’t so easily answered for those with more health concerns, though.
How your health affects your life insurance rates
Your health and your life insurance premium go hand-in-hand. The truth is, the healthier that you are deemed, the better you can expect your life insurance premiums to be.
Since death is one of the only things guaranteed in life, insurers have to weigh the risk of you dying while under their policy. If you do pass away while insured, the company will be required to pay out a death benefit to your dependents, which can be pretty costly.
But if they play their cards right, your insurer can make a pretty penny off of you. If you don’t die during your term life insurance period, they don’t have to pay.
How far back does your health history matter?
Insurance companies consider your overall health history when deciding whether or not to approve your application and the premiums that you will pay.
You don’t have to worry about remembering the exact date that you contracted childhood chickenpox, but what you should be prepared to discuss are any medical issues that still affect your life on an ongoing basis. This also includes any diagnoses you’ve recently recovered from.
Some of the most common measures of your health include:
- Pre-existing conditions. There’s no universal list of “pre-existing conditions,” but generally they include every medical diagnosis you’ve received from a professional before applying for insurance – whether the diagnosis has a mild or serious impact on your life. These could include asthma, diabetes, depression, high blood pressure, and epilepsy.
- Smoking. Smokers and other tobacco users might pay up to four times as much as nonsmokers for a similar policy (all other factors being equal). Even if you’re otherwise in excellent health, underwriters think about health difficulties you could develop down the line as a result of tobacco use.
- Weight and BMI. Most insurance companies evaluate weight using the Body Mass Index, or BMI, which measures your height/weight ratio. A weight lower or higher than the recommended range on your BMI chart typically means higher premiums.
- Family medical history. Insurers want to know about any diseases in your biological family that could be hereditary, like heart disease and most forms of cancer. They’ll only ask about immediate family – biological parents, siblings, and possibly grandparents – so don’t worry about unraveling the whole family tree.
- Drinking. Heavy drinking can raise your premiums, drop you to a substandard table rating, or bar you from coverage. Additionally, driving under the influence is a huge red flag for insurers.
- Drug use. Any prescription medications that are potentially addictive – certain painkillers, opiate substitutes like methadone, etc. – could raise your rates or even get you denied. If you’ve been in treatment for drug addiction, your insurers will want to know the details, including length and frequency of use, hospitalizations, rehab stints, and relapses.
How will my health be measured?
Once you apply for life insurance, the provider —using trusted algorithms, human insight, or a little of both—evaluates your application and assigns you to a risk class.
This classification, which is partially based on your health, determines how much you’ll pay in premiums, and in some cases, it affects the amount you can request for a death benefit.
Here are the ratings that most providers use.
- Preferred Plus. A rating reserved, typically, for nonsmokers in excellent health and with no major medical issues. Typically, preferred plus candidates pay the lowest rates.
- Preferred. This rating is often assigned to those with only a few minor (and well-controlled) medical conditions or a Body Mass Index (BMI) that is on the higher side – as long as you’re otherwise pretty healthy.
- Standard Plus. A more serious chronic health condition or a red flag in your family health history bumps you down to “standard plus.” Smokers who are otherwise in excellent health might qualify for Standard or Standard Plus ratings, depending on the provider.
- Standard. If your health is okay but not great – if you’re managing multiple medical conditions, have a very high BMI, and/or have a complex family health history – you might qualify for Standard ratings, which come with higher premiums.
- Table rating (aka “substandard”). Sometimes called “substandard,” these ratings are for candidates with the highest risk (think cancer survivors, smokers with lung issues, or skydiving firefighters). A table rating doesn’t necessarily disqualify you from coverage, but it means you’ll pay a lot more if you do qualify.
Here’s a sample of monthly non-smoking rates for a 20-year term life insurance policy with a $500,000 death benefit:
Rating Female Male
Preferred Plus $19.80 $23.75
Preferred $24.40 $29.02
Standard Plus $33.50 $40.13
Standard $37.21 $45.56
Table Rating 1 $44.92 $55.11
Table Rating 2 $52.47 $64.61
Table Rating 3 $60.08 $74.17
Will I be denied life insurance just because I have a health condition?
Most providers will not deny you coverage based solely on the fact that you have a health condition. When considering your application, an underwriter may consider the following specific factors about your health:
- How severe your diagnoses are.
- When you were diagnosed.
- Your prescription history.
- How long you’ve been in treatment.
- Whether or not your condition has improved with time.
- Whether or not you’ve been hospitalized.
- If your current diagnoses or lifestyle habits could lead to other health conditions down the line.
Will certain health conditions disqualify you from receiving life insurance?
With so many life insurance options, it’s possible for almost anyone to find some kind of coverage. But an affordable plan with a decently sized death benefit is another story.
If you’ve had any of the following health conditions within the past 10 years, you might be unable to qualify for a traditional term policy:
- A heart attack.
- Diagnosed alcoholism or drug addiction.
- Kidney disease.
- HIV or AIDS (for some insurers).
Even in these cases, healthy habits can work in your favor. If you can prove you’re monitoring your health, seeing a doctor, and taking any necessary medications, some providers will work with you.
A “guaranteed issue” policy, which offers a limited death benefit, is also worth considering.
How do insurance companies learn about your health?
The initial questionnaire
With many providers, you answer a few questions about your health history online before you even get a price quote. The quote isn’t a guarantee or a final price, just an idea of what you might pay if you bought a policy there.
Be as honest as possible about your health info, even if the truth bumps up your premium price. Insurers can cancel your policy, including the death benefit, if they find out you concealed a health condition or lied about vital stats.
Prescription drug databases
Every time a doctor prescribes you medication to treat a condition, there’s a record of this prescription. Insurers can cross-check these records easily; it’s one of the first things they check when they go through your application.
With your permission, insurers can examine records from any doctors or hospitals that have treated you. Typically, they’ll verify the conditions and/or hospital admissions you’ve already reported, and learn about any you didn’t.
If you have pre-existing conditions, you’ll want to show evidence that you’re moving forward with appropriate treatment or management, like regular doctors’ appointments and medications. Insurers consider you less of a risk if your illnesses are under control.
The medical exam
An exam is the last step before qualifying for a policy. It’s not much different than an annual physical at the doctor’s office – a medical worker checks height and weight, blood pressure, cholesterol, and other stats.
They’ll also take a blood and urine sample to screen for drugs, alcohol, tobacco, blood sugar levels, etc.
Sometimes the exam will turn up info that surprises you (if you haven’t been to the doctor in a while, you might not notice changes to your cholesterol or heart rate).
New blips on your health radar might not disqualify you, but they can raise your rates a little.
What about no-exam policies?
Plenty of life insurance companies offer policies that don’t require a medical exam, and this option has some pluses – for one, policies are issued much more quickly.
Read more: What Tests Are Required For Life Insurance?
But don’t make the mistake of thinking a no-exam policy is a shortcut that lets you hide health conditions. Insurers still require some basic medical info, and they’ll still check prescription databases.
There are “guaranteed issue” policies that accept every applicant, but they’re usually reserved for older candidates in poor health, and they have much smaller death benefits.
There’s another reason to think twice about no-exam policies: because you’re giving the insurer less data, they have to take on more risk, so they’ll often charge you higher premiums than they would if you opted for an exam.
Healthy choices can help make your life insurance more affordable. But smart management of chronic medical conditions, or commitment to long-term recovery, can make a big difference, too.
And with a term policy, you have a chance to improve some health factors by the time the term ends and score a better price if you choose to renew.