As per estimates, one in every two Americans is at risk of being denied health insurance coverage because of a pre-existing condition. As per the Department of Health and Human Services’ report, 50 to 129 million non-elderly Americans suffer from some form of a pre-existing condition. This can later affect their eligibility for an insurance package.

According to Gary P. Cubeta of Insurance for Final Expense, you may have to opt for life insurance with pre existing medical conditions. But what are your options and how to avail them? In this article, you’ll learn about such life insurance policies and the alternatives.

What is a Pre-existing Condition?

It’s important to define the concept of “pre-existing condition.” Insurance carriers define it as a health condition that applicants have before or when applying for insurance coverage. It’s the company that decides what a pre-existing condition is and isn’t. For example, some carriers have obvious definitions like heart disease or blood cancer that are life-threatening. Others are less so and consider conditions like asthma and high blood pressure as dangerous.

The consequence is either they disqualify you for their insurance policy or charge a higher premium. That’s because they perceive you to be a high-risk customer.

When you apply for the insurance policy, the agent or broker will offer you a form to fill up. It will ask you questions about your health conditions. Based on the answers, the broker will put you in any of the following categories:

• Preferred – You have one or two minor issues, and you’re almost an ideal customer.
• Preferred Plus – You have no health issue, and you’re an ideal customer.
• Standard – You have a pre-existing condition that’s low-risk and has a minor impact on your overall health (asthma, for example)
• Substandard – You have average health and a moderate-risk condition such as diabetes.

Life Insurance for Pre-existing Medical Condition

It’s possible to get a life insurance policy if you have a low to moderate risk health condition. You will be required to provide a disclosure about the disease you’re suffering from, among other details.

Some agents will ask you to undergo separate medical tests like the EKG test to cross-check the details you provided. But you’ll be charged with a higher premium. It varies from carrier to carrier and can be as high as 50% of the regular price. If you have a life-threatening disease like cancer, you might be out rightly disqualified or charged an even higher fee.

So are there any alternative plans you can sign up for? Thankfully, there are a few alternative options. Some of them are mentioned below.

Guaranteed Issue Whole Life Insurance

Guaranteed Issue Whole Life Insurance policies are practically whole life insurance policies. That means they offer lifetime coverage, provided you’re paying the premiums on time.

Since these are guaranteed policies, there is no medical examination or questionnaire involved. Everyone who applies for the policy gets approved.

There’s a coverage limit, though, which is less than $25,000. Most people opt for these policies to cover end-of-life costs like funeral and cremation. The amount is sufficient for such costs. Depending on how you plan your funeral, your family members will be left with a surplus amount which they can spend elsewhere.

The guaranteed issue whole life insurance policies are often the most expensive ones. So you’d be paying a higher premium cost to obtain the coverage. The pre-existing condition, age, gender, and total coverage needed are other factors that influence the premium cost.

Simplified Issue Life Insurance

Unlike guaranteed issue policies, simplified issues do ask you some questions about your health and pre-existing conditions. But they’re few compared to general life insurance policies.

Simplified Issue Life Insurance policies also have a high approval rate. You can obtain the insurance policy right away, and the coverage can be as high as $100,000. The death benefits are, however, lesser than complete underwritten insurance packages. Since there is no medical examination, the underlying health complications cannot be factored in.

The premiums you’d have to pay depend on the few questions asked about your health. A few companies will require you to undergo medical tests, but only when you have a serious issue.

If you have a complicated pre-existing condition, you must consult with an independent broker before applying for any policy. They can help you compare the policies of various companies and figure out the right policy.

Gary P. Cubeta of Insurance for Final Expense advises his clients to figure out their requirements before taking up any policy, especially when buying life insurance with pre-existing medical conditions. But it requires some research and scouting to find the correct carrier and policy.