The thought of purchasing life insurance has probably passed through your mind at one time or another. However, have you ever asked yourself, “am I eligible for life insurance?” The answer to that is, probably yes. Let me explain.
All traditional life insurance products require you to give the insurance company some form of medical evidence. How the insurance company obtains medical evidence, depends on the company issuing the insurance, the amount of the policy you are buying, and your age. For example, policies less than $100,000, may in fact require you to only answer medical questions on the insurance application. Larger policies may require a paramedical examination and/or a report from a doctor. In this case, the insurance broker will arrange an appointment for a paramedical nurse to visit with you to collect medical information such as a urine sample, possibly a blood sample, and check your vitals. Once you reach age 50, a paramedical exam may be required by most insurance companies, regardless of the amount of insurance purchased.
So, why would someone not be eligible for traditional life insurance? Well there are a few reasons.
Is there a terminal illness or has there been a diagnoses of a terminal illness?
Some types of cancers are deemed terminal. Other diseases, such as ALS, (Lou Gehrig’s disease) and AIDS/HIV are considered to be terminal illnesses. Any disease where life expectancy is only 12 months, are also considered to be a terminal illness. In such cases, coverage is probably not available.
Is there a pre-existing condition?
If an individual has an existing condition or disease, in the insurance industry, this is called a pre-existing condition. Some pre-existing conditions, such as strokes, heart attacks may exclude an individual from being able to buy life insurance.
Been previously declined for life insurance coverage?
Just because an insurance application was declined in the past from one insurance company, doesn’t necessarily mean an application would be declined today, by the same, or another insurance company. If this has happened, talk to an Insurance broker about your specific situation.
Are there other options?
If a person has the luxury of group insurance through an employer, most employee benefit programs have a life insurance component which will allow the purchase of a defined amount of insurance without medical evidence. When the individual terminates their group insurance, usually because of a change in employment, most benefit packages allow the life insurance portion to be converted to an individual plan, without evidence of good health, or in other words, no medical evidence. Generally, the time frame within which conversion to an individual policy is 31 days. It is a great way to pick up some life insurance coverage if a pre-existing condition impairs a person to get insurance at reasonable rates, if at all through normal markets.
There is another option to purchase life insurance; Guaranteed to Issue, or No Medical Life Insurance. The face amount on these types of policies may be less than what may be needed or desired. However, there should be enough coverage to cover final expenses and have some money left over for loved ones. The primary difference between traditional Insurance, and Guaranteed to Issue Insurance, is cost. The cost for Guaranteed to Issue Insurance is substantially more than that for traditional life insurance coverage.
I hope that this information has been helpful. For more information, on this and other types of personal insurance, please visit our website.
Jordan Kovats, B.Sc.
The Benefit Guys