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Health History Considerations


Health history issues have a significant impact on the cost you incur to obtain life insurance or health insurance. This is because health history considerations are one of the most important factors used by insurance company underwriters. If you have major health issues, you may not be able to obtain a traditional life insurance policy at all. Some of these issues are recent heart attack or cancer, diabetes combined with obesity and/or heart problems, HIV/AIDS, stroke or serious lung disease. If you have one of these conditions and have been denied coverage, you can still obtain what is called guaranteed issue life insurance.

Guaranteed issue insurance, also called graded death benefit insurance, is only offered by a few companies. You will probably have to find a local agent in your state who can obtain this for you. This insurance is usually limited to $20,000 or less and is meant to provide funds for final expenses and a small estate. Graded death benefit means that, for the first two or three years, the payout is limited to the premiums paid plus interest. If you live beyond this graded period, the full face amount is available for payout to your beneficiary.

If you have had health conditions in the past, or if your current condition is not too severe, you can probably obtain a fully underwritten policy, as long as you are willing to pay a higher premium. The advantage here is that you can obtain coverage for the full amount you have in mind, dependent only on other considerations such as your age and annual income. For instance, you may want coverage of $1,000,000 for a 20 year period until your children are out of college.

If you quality for a fully underwritten policy with these health conditions, the underwriter will apply what is called a table rating to your policy. A table rating is a factor by which the standard premium rate is multiplied to obtain the premium rate that you will pay. For instance, a table rating of 4 (or D) would double the standard rate. A table 8 (or H) triples the standard rate.

The good news is that you can obtain coverage, even with serious health history issues, if you are willing to pay the additional premium. If you need the insurance, for instance to protect your income so that your children can be supported until they can support themselves, it is a cost well worth incurring.


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