Are You Uninsurable For Life Insurance?

By: Jill Brennan

You'd like to organize life insurance but wonder if you would be classified as uninsurable. What can you do?

When a life insurance company assesses an individual for life insurance they are primarily interested in the life expectancy of the applicant. You may be classified as uninsurable if a company rates you as having a high probability of an early death. What the exact criteria for assessing an uninsurable applicant are vary from one company to the next.

However, if you have a pre-existing medical condition that often results in premature death then you are likely to be considered uninsurable. Whether you are or not depends on a number of factors:

. the nature and severity of your medical condition
. your age. For example, if you contract Hepatitis C at a young age then you are considered more of a risk than someone who is older.
. your lifestyle – in particular how healthy your lifestyle is
. time since diagnosis – if it is only a relatively recent diagnosis then you are a higher risk because the impact of the medical condition is likely to be unknown. For example, someone that is recently diagnosed with Multiple Sclerosis would be considered a higher risk than someone who was diagnosed with the same condition ten years prior. This is due to the degenerative nature of the condition and because it affects suffers differently.
. health of your body and organs. If your body is coping moderately well despite an existing condition then a life insurance company will likely take that into account.

So what can you do?
One way around this is if you are employed by a company that offers life insurance to all employees. Because the risk to the insurance company is spread over many workers, sometimes hundreds or thousands, then it is usually possible for workers with specific medical problems to receive cover.

An applicant that is considered uninsurable by one company may be an acceptable risk to another company but may have to pay a higher premium for their life insurance cover.

Just because you are considered uninsurable at present doesn't mean that you will always be. If you can demonstrate that your health has been stable or improved or that you have to taken steps to improve your health then you will likely have grounds for seeking a reassessment by a life insurance company. For example, you could recover from a medical problem that currently rules out your eligibility for life insurance policy.

There are also particular types of policies – sometimes called 'Modified Life Insurance' or 'Guarantee Issue Life Insurance' – where no health related questions are asked but they have a probationary period. If you die within the first 2-3 years they only pay out premiums that have already been paid plus interest. If you pass the probationary period then they pay the regular stipulated death benefit.

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