How to Get Cheap Life Insurance With Preexisting Conditions

COVID-19 update: If you're thinking about life insurance in the context of the coronavirus, see below for information on whether it counts as a preexisting condition.

When it comes to life insurance, there's a wide range of health problems that may count as preexisting medical conditions that can either increase your rates or prevent you from applying for coverage. However, depending on what type of medical problems you have, you can typically find an insurance company that will provide cheap quotes for the coverage you need.

Term life insurance is typically the cheapest form of coverage, even if you have a preexisting medical condition, but not everyone can pass the underwriting stage. In such cases, policies such as no medical exam or guaranteed issue policies come at higher rates but accept a wider range of medical problems. With any of these policies, a preexisting condition may limit the amount of your death benefit.

Term life insurance with preexisting conditions

Term life insurance offers coverage for a set period of time — typically between five and 35 years — during which your beneficiary will receive a payout if you pass. If you qualify for term life insurance coverage, a preexisting condition will raise your quotes significantly. However, term life insurance lets you choose a much higher death benefit than products with limited underwriting.

Term life insurance quotes are determined in large part by your health, and insurers have four standard tiers of health ratings. Premiums vary a small amount within a given health tier, but if you have a significant enough medical condition to change tiers, the quotes you are offered will be much higher.

Each insurer has its own health requirements and set of conditions it is willing to insure. So if you have a preexisting condition, you'll probably want to consult with an independent insurance agent. Agents represent multiple companies and have the expertise to determine which insurer will get you the most affordable rates.

No medical exam and simplified issue life insurance with preexisting conditions

Simplified issue and no medical exam policies are either term or permanent life insurance policies with fewer underwriting requirements. There's no medical exam, and depending on the insurer, there may also be fewer health questions in the application. Simplified issue policies have lower maximum death benefits than fully underwritten policies, but you can find coverage up to $250,000 with some insurers.

When applying for simplified issue life insurance, you’ll be asked several health questions to determine whether you qualify for coverage and, if so, what premiums you qualify for. It’s important to be honest, as insurers regularly check your answers against multiple databases and can cancel your coverage if they find any discrepancies.

Depending on the insurer, you might be disqualified from simplified issue life insurance if:

We don't recommend simplified issue policies for healthy people, since you'll pay more for the same coverage. Some agents will feature the convenience of no medical exam policies, but the time saved by skipping the medical exam (which typically takes less than an hour and can be scheduled wherever is most convenient) doesn’t make up for the additional cost of higher premiums over several years. However, these policies are a good alternative if you don’t qualify for fully underwritten term life insurance or your preexisting medical condition is significant enough that most insurers will not accept it.

Guaranteed acceptance life insurance with preexisting conditions

Guaranteed acceptance policies are typically whole life insurance policies, meaning they offer coverage for your lifetime so long as you continue to pay premiums. During the application process there are no health questions and you don't have to take a medical exam, so these policies are a great alternative if you have quite severe preexisting conditions.

Death benefits for guaranteed acceptance policies are generally limited to less than $25,000. If you want enough coverage for end-of-life costs such as a funeral, guaranteed acceptance coverage should be sufficient. Unfortunately, if you have a severe enough preexisting condition that you wouldn't qualify for non-guaranteed coverage, you're unlikely to find any insurer that offers over $50,000 in death benefits.

Additionally, guaranteed acceptance policies usually have a two- to three-year period after purchase during which your beneficiary will receive little to no payout if you die. For example, if you die within the first two years of purchasing Colonial Penn's guaranteed acceptance policy, your beneficiary just receives the sum of your premium payments plus 7% interest compounded annually.

For a particular amount of coverage, a guaranteed acceptance policy will almost always be the most expensive option since the insurer accepts all applicants. Given the high quotes, we don't recommend guaranteed acceptance life insurance if you're healthy enough to qualify for term life insurance. In some cases, depending on your medical conditions and insurer, quotes can be so high that you pay more in premiums over the life of the policy than your beneficiary receives as a payout.

Which preexisting conditions matter when getting life insurance?

In the context of life insurance, preexisting medical conditions include a wide range of health issues from heart disease to obesity. Below, we've listed some of the most common health problems that could impact your ability to get life insurance or cause you to pay higher premiums.

With the current spread of COVID-19 across the globe, life insurance companies are seeing a spike in interest from people who are motivated to get coverage due to worries about infection. If you currently have COVID-19, some life insurance providers may count it as a preexisting condition and ask you to reapply after recovery.