Applying for life insurance with a history of illness

These days, life insurance is not an option anymore; instead, it has become mandatory for every Indian. The life insurance application process is an intricate endeavor, as the applicant needs to mention everything, including the medical histories of the person and other family members. Moreover, the life insurance premium also depends on several parameters, including the health and lifestyle of the policyholder.

Undoubtedly, life insurance is an investment, and thus, insurance companies need to check viability before granting the application. So, how will an individual proceed with a history of prolonged illness or pre-existing medical conditions?

What is a pre-existing medical condition?

As per IDRAI’s guidelines, all insurance companies need to follow a standard set of definitions related to health insurance terminology. A pre-existing medical condition is an injury or a related condition where symptoms have been present for some time. In addition, the policyholder adopted medical advice and treatment at least 48 months before the issuance of the first policy.

Significance of pre-existing medical conditions

Pre-existing medical conditions can significantly impact your life insurance application policy. Thus, you should disclose your medical history properly at the time of application. Insurers want to know about your family’s medical history as well. 

• If your parents and brothers/sisters have suffered a serious medical condition, your chance of falling victim will increase. 
• Insurers are used to check for inherited conditions such as coronary heart disease, stroke, cancer, and diabetes.
• If your close family member carries any of these serious conditions, the insurance provider could bump up your premiums.

But if you hide or suppress the fact, your claim may get rejected later due to non-disclosure of essential facts. If the facts don’t match with the information provided at the time of application, the insurer can reject your claim at any time.

During the time of application, you are asked to complete a questionnaire. If there is any health issue, most insurance companies usually write to your GP for details of your medical history, particularly if you want to purchase a large amount of cover. Sometimes, they may ask for a medical check-up before you can be insured. However, don’t get allured to skate over any medical problems to get a cheaper premium. If these come even after your demise, you will be considered in breach of your policy conditions, and the insurance company has every right to cancel your payout.

The impact of any medical conditions on your life insurance premiums will depend on the illness that you are carrying. For example, if you are diagnosed with cancer, you need to get rid of the symptoms for at least five years before the insurance company will offer you protection. On the other hand, if you have Type I diabetes, you could pay two or three times as much for coverage.

What insurers usually check while dealing with family history?

• When family history is concerned, most insurers used to check how many family members were affected and their ages at that time. 
• If only one of your close members was affected, then it may not hamper your life insurance premiums. But it solely depends on the insurer. 
• The insurance provider used to check for family illnesses that were diagnosed before age 60 or 65. If anything comes up after that time frame, the company used to discard them.
• If there is any family history of illness, the company either charges you more or excludes that particular condition from cover. But the rest of the conditions will be covered by the insurer.

Before filling your life insurance application, you should thoroughly check various types of life insurance policies from different insurers. In addition, the person should check for life insurance with illness based on his/her existing health condition. Also, don’t forget to check how these conditions are affecting the coverage of your insurance and other riders.

If a person with a prior medical history wants to apply for a life insurance policy, he should consider the following parameters before making a final decision.

• Compare various types of life insurance policies from different companies.
• Purchase life insurance as early as possible because you may become susceptible to diseases as you grow older. Waning health conditions may lead to expensive premiums for your life insurance.
• Disclose everything at the time of application. Never try to hide any material facts.

Alternative models

As we are living in this fast-paced world thus, health conditions are becoming the norm. So, life insurance companies are trying to merge critical care & medical insurance along with life insurance policies. Nowadays, in the Indian insurance market, life and health insurance are available as one holistic platform that successfully meets all the needs and requirements of the policyholders. Many companies have introduced their critical illness insurance plans along with life insurance policies. LIC is also offering health coverage apart from the LIC term insurance plan.

Alternative models are advantageous for those with existing medical conditions covered by provisional riders in their life insurance policy plans. If they need to pay hefty premiums because of their health conditions, then comprehensive health insurance packages will bring smiles to their faces and provide some relief at the time of medical need.