Life Insurance: Pre-Existing Conditions

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Pre-existing conditions can affect many things, including whether an applicant will qualify for health or life insurance. Pre-existing conditions can also determine which rates someone might pay, since certain health problems are viewed by insurers as higher risk than others.

A pre-existing condition is any medical condition that was diagnosed before an individual's health or life insurance benefitslife insurance benefits went into effect. In other words, if an applicant was diagnosed with high cholesterol any time before applying for a life insurance policy, his or her rates may be higher than someone who has never been diagnosed with cholesterol problems. Along those same lines, before the Patient Protection and Affordable Care Act of 2014, health insurers could have refused to issue a policy to an applicant with a history of cancer or diabetes. Since the Affordable Care Act became law, health insurance companies are no longer allowed to deny an applicant coverage for their pre-existing condition. The law now requires that health insurance companies be held accountable for their actions. Anyone with chronic health conditions or illnesses can now receive the same type of coverage as policyholders who are deemed healthy. Life insurance, however, works somewhat differently. Insurance companies look at an applicant's pre-existing conditions to determine what premiums to charge. An applicant who appears healthy with no previous issues may qualify for top-tier insurance rates, which are the most affordable rates available. Those with previously diagnosed conditions or chronic illnesses are considered higher risk and will fall into a category that requires them to pay higher premiums. In some cases, an insurer might outright deny an applicant with pre-existing conditions because the person is considered too risky to insure. Why do life insurance companies care about pre-existing conditions? Simply put, insurers are concerned with life expectancy. They want to know that you're not at risk of dying anytime soon so you can continue to pay your premiums and delay the policy payout on their end. Just because you have a pre-existing condition, though, doesn't mean you can't find coverage. Research options and shop around to see what's available, as not every company will charge the same premiums. When filling out the insurance application, always be honest about any pre-existing conditions even if you think listing them will result in automatic denial. Insurance companies have ways of checking applicant responses, and failing to disclose vital information about your health can result in immediate denial or loss of coverage.

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