Life Insurance for Diabetics: What You Need to Know

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If you, or someone you know, has a pre-existing medical condition and has applied for life insurance, you know that it can be difficult to get approved. Like all enterprises, life insurance companies need to turn a profit to stay in business, and issuing policies to people with pre-existing medical conditions poses an increased threat to their profitability. 

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This can be confusing to navigate, and it’s normal to have questions. For example, can you get life insurance if you’re diabetic?

However, that doesn’t mean that you can’t be issued a life insurance policy with a pre-existing condition. Some companies specialize in insuring people with complicated health histories. They’re skilled at crafting coverage and devising pricing that will protect the policyholder and make the company money. This article will focus on life insurance for diabetics and everything you need to know. 

Can You Buy a Life Insurance Policy if You’re Diabetic? 

Is life insurance an option if you’re diabetic? The good news is yes, you can buy life insurance if you have Type 1 or Type 2 diabetes. However, the type of policy you’ll qualify for, how easy the application process will be, and the cost of coverage will depend on three primary factors:

  • The type of diabetes you have
  • The age you were diagnosed
  • How it’s controlled

For example, a person diagnosed in their 60s with Type 2 diabetes and who controls it successfully with diet and exercise will likely qualify for preferred life insurance rates. On the other hand, someone who is insulin-dependent or has experienced complications from their diabetes may still be able to be issued a policy, but their coverage options may be limited and their premiums much higher than standard rates. 

What Are the Best Types of Life Insurance for Diabetics? 

There are three things people with diabetes should consider when deciding the best type of life insurance for themselves and their families:

  1. The type of policy (term life, whole life, or guaranteed issue life insurance)
  2. The level of underwriting by the insurer (fully underwritten, no medical exam, or guaranteed issue)
  3. The amount of coverage needed

Each of these will influence which policies you should consider and the amount of underwriting that will be necessary to qualify. 

Adding more coverage after you’re issued a policy will likely require you to undergo additional underwriting. This can be particularly risky for diabetics as time passes since the chances of experiencing side effects or complications increase. This could affect your ability to qualify for additional coverage or cause you to pay much higher rates than you did for your initial policy. 

Term life insurance

First, this is the least expensive type of coverage you can buy because it only offers protection for a predetermined period of time, such as 5,10, or 20 years. It strictly provides a death benefit to your beneficiary if you die during the policy term; it doesn’t accumulate cash value. 

Though term insurance is generally less expensive than other life insurance types, it carries an inherent risk with it. The risk is that if the policy’s term expires and the insured is still alive, the insured may not be able to qualify for another term policy if they’ve experienced any complications related to their diabetes. 

Some term policies carry a guaranteed insurability option to convert their policy to a permanent type of life insurance that won’t expire before they die. It’s best to consult with a life insurance agent who can help you find this type of policy and help you determine how much life insurance you may need.

Whole life insurance

For diabetics, whole life insurance can be much more expensive than term insurance, but it has several advantages. To begin, whole life builds cash value. A percentage of every dollar you pay in premiums is deposited into the cash value component of your policy. The cash value is credited interest regularly, and dividends paid by the insurer can also be added to it, depending upon the company's profitability. 

Similarly, whole life insurance won’t expire. Unlike term life insurance, you can keep your whole life policy for as long as you live, as long as you pay your premiums on time. Lastly, your premiums will never increase. Regardless of how long you live or how the condition of your health changes, your premiums will always remain the same with a whole life policy.

Guaranteed universal life insurance

One other type of permanent life insurance is guaranteed universal life insurance. Not all life insurance companies offer this type of coverage, but it can be less expensive since the cash value component is negligible, while still providing coverage for your entire life. 

Guaranteed issue life insurance is a third option available and is perfect if you can’t qualify for term or whole life insurance. Guaranteed issue policies are the most expensive policies on the market because the life insurance company assumes a large amount of risk by not requiring you to answer any health questions on an application or undergo a medical examination. 

These policies usually offer limited death benefit amounts ($2,000 to $25,000). They also come with a “graded death benefit,” meaning that your beneficiary will only receive a partial payment of the death benefit if you die due to a non-accident during the policies’ first two or three years.

For example, if you bought a guaranteed issue policy and died during the first year you owned the policy due to diabetic complications, your family may receive only the amount of premiums you paid, plus interest. 

Does Having Diabetes Affect Premiums or Payouts?

Having diabetes will affect your premiums, but to what extent will depend upon your history with the disorder and your current health status. 

To determine your premiums, your application for a term or whole life policy will go through a process insurance companies use called underwriting. Part of this process entails your application undergoing a thorough review by a person called an “underwriter.” 

The underwriter thoroughly reviews your application, obtains and reads your medical records to understand your medical history and current health status, and evaluates the results of your medical examination (if it was required). They will then decide whether or not to approve your application and price it accordingly if you’re approved.

Your payout as a person with diabetes will be specified in the policy you receive from the insurance company. How long it takes to get a life insurance payout will not be affected by being diabetic. The insurance company is legally required to pay your beneficiary according to the policy’s terms. This usually happens in 4-8 weeks unless the death claim is being investigated. 

If you feel that the insurer is unnecessarily delaying payment, you can contact your state insurance department for assistance. 

How to Shop for a Life Insurance Policy If You’re Diabetic 

If you have diabetes, you’ll be able to efficiently find a policy that works for you by enlisting the services of an independent life insurance agent, particularly one who specializes in helping people with diabetes buy life insurance. An independent life insurance agent can obtain quotes for you from various life insurers. 

The companies the agent may provide quotes from could include:

Insurer

Types of diabetes

Minimum age of diagnosis

Medical exam?

AIG

Type 2

30

Exam

American National

Type 2

40

No exam option

Americo

Type 2

30

No exam option

Banner Life

Type 2

Varies

Exam

John Hancock

Type 1, Type 2

Varies

No exam option

Mutual of Omaha

Type 1, Type 2

50

No exam option

North American Co.

Type 2

40

No exam option

Phoenix

Type 1, Type 2

Varies

No exam option

Protective

Type 2

Varies

Exam

Prudential

Type 1, Type 2

Varies

Exam

Royal Neighbors of America

Type 2

30

No exam option

Sagicor

Type 2

50

No exam option

(list courtesy of valuepenguin.com)

Your rates are going to vary widely by insurer. Each company has its own underwriting guidelines and evaluates your risk individually, taking into account the date of onset of your diabetes, medications you take, the type of policy you’re applying for, the size of the policy’s death benefit, and other factors.

Frequently Asked Questions: Buying Life Insurance With Diabetes

 Since there are multiple types of diabetes, buying life insurance if you have diabetes can be challenging. To help make the process easier for you, we address some questions that diabetics often ask when searching for coverage.

Is there a difference in buying life insurance if you have Type 1 or Type 2 diabetes?

The type of diabetes you have, Type 1 or Type 2, along with other health factors, such as height and weight, tobacco use, other pre-existing medical conditions, etc., will impact your coverage options and your premiums

  • Type 1: People who have Type 1 diabetes are considered at higher risk than those with Type 2 and often find it more challenging to buy life insurance. Insurers consider Type 1 more difficult to manage. Since Type 1 diabetes is frequently diagnosed in children or teens, it is viewed as a higher risk factor since the insured has been physically impacted for more years.
  • Type 2: Insurers are more likely to approve an application submitted by someone with Type 2 diabetes, particularly if the person seeking coverage has been able to manage their condition with oral medication or lifestyle adjustments, has had no complications and is otherwise healthy. However, having Type 2 will affect your premiums.

It should be mentioned that diabetes occurring in pregnant women, known as gestational diabetes, may cause life insurance companies to charge a higher premium if a woman applies for life insurance with that condition.

Because of this, some financial advisors counsel their pregnant female clients to wait until several months after giving birth before applying for a life insurance policy since gestational diabetes can be a temporary condition that goes away shortly after birth.

What are your options if you’re denied coverage because of your diabetes?

If you’re denied coverage because of your diabetes, you have a couple of options. First, consider guaranteed issue life insurance, which was discussed earlier. As the name implies, insurers guarantee they’ll issue you a policy, regardless of the type of diabetes you have, how long you’ve had it, complications you may have experienced, etc. The bottom line: if you apply, you will be approved. 

However, remember that you will pay more for guaranteed issue life insurance than any other type of life insurance, including term or whole life insurance. The insurance will be issuing you a policy sight unseen and without knowing anything about your health history, which is why you’ll pay more for this type of coverage. 

Second, look into simplified issue life insurance policies. Simplified issue policies fall somewhere between a standard life insurance policy and guaranteed issue life insurance. You will be required to answer several health questions on a short application, but you won’t have to undergo a medical exam. 

What happens if you get diabetes after you’ve purchased a life insurance policy?

Once you’re issued a life insurance policy, an insurer can’t cancel your policy or raise your rates if you’re diagnosed with diabetes in the future. They’re legally obligated to honor the policy that they issued. 

Diabetics: Reduce Other Risk Factors to Qualify for Life Insurance

Once you’re diagnosed as diabetic, the chances are good that you’ll always find it challenging to purchase life insurance. However, there are several things you can do that will help you maintain good health and continue to qualify for life insurance, namely that you maintain a healthy weight, don’t use tobacco products or drink alcohol excessively, and exercise regularly. 

You may not be able to change the past and alter the fact that you have diabetes, but you can influence the future by taking care of yourself today.

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