How to Get Life Insurance Following a Serious Illness like Heart Disease
There’s nothing like experiencing the loss of a loved one and then compounding the grief with financial stress. Paying for final expenses and debts is the last thing on anyone’s mind during this time. Still, they are essential details that require attention.
Life is unpredictable; unfortunately, not everyone has a safety net to fall back on when things take a turn for the worse. Shockingly, only around half of Americans have a life insurance policy or the resources to handle unexpected expenses.
Covering Final Expenses
The average funeral cost ranges between $7,000 and $9,000 but can be well over $10,000 in some states and situations. Funerals, however, aren’t the only financial burden. The family also assumes the responsibility of covering any unpaid medical and other debts. The financial stress compounds further if you have minor or special needs children to care for.
Life insurance offers a solution to help you cover some of these financial bumps. Buying life insurance when you’re sick is challenging but not impossible.
Life Insurance vs. Severe and Chronic Illness
No one disputes that buying life insurance when you’re not ill is best. But unfortunately, severe and chronic illnesses sometimes happen before you have life insurance coverage. One day you feel fine, and the next, you wake up in the hospital to discover you’ve just had a heart attack. It doesn’t matter if it’s your first or subsequent attack; insurers now view you as a higher risk.
So, what does this mean?
Before getting sick, you might have qualified for premium rates, maybe even the best, depending on your health. However, now those rates might no longer apply to your specific situation.
With your health challenges raising new “red flags” of risk for insurers, it might even limit the type of life insurance available to you. So, let’s look at the different types of life insurance and the impact of chronic and severe illnesses on those choices.
Term and Whole Life
Term life insurance is the most common insurance policy and the most affordable option.
Whole life, also called universal or permanent life, is more expensive and often comes with a cash value option.
Both term life and whole life insurance require full underwriting approval, which means you’ll need a medical exam to confirm you’re in good health. Additionally, severe illnesses like heart disease can disqualify you from this option. This is especially true if you’ve had a heart attack within the past couple of years or have ongoing chronic and severe disease symptoms.
Sometimes, term life and whole life are options, but often at higher premium rates than a healthier person.
However, you’ll need a different life insurance option if your illness is more severe. That’s where simplified issue and guaranteed whole-life policies come in.
Simplified Issue Life Insurance
Simplified issue policies are often term life policies, but sometimes they might be whole life. They’re also known as no exam life insurance.
Full underwriting approval with a medical exam is not required. Instead, the insurer will ask you medical questions to determine your eligibility for coverage.
However, you must have had at least two to three years pass since your diagnosis with no significant issues or ongoing problems to qualify.
These policies cost more than regular term life or whole life policies. Still, they might be the best option for those with some history of chronic illness, like heart disease.
Guaranteed Whole Life
If you're living with congestive heart failure, a recent heart attack, or an ongoing battle with cancer, you may find that guaranteed whole life insurance is your best choice.
Guaranteed whole life often offers a last-ditch option for life insurance coverage.
Guaranteed life policies offer very little coverage, often between $5,000 and $15,000, but it can be more, depending on your situation. However, this type of insurance tends to be the most expensive and offers the least coverage.
While they may be costly and provide limited coverage, those who suffer from severe and chronic illnesses may find that these policies are their only option for life insurance.
Guaranteed whole life often comes with stipulations; you must survive at least two years before it pays the full coverage. If you don’t, the payout is usually the amount in premiums already paid and a nominal amount of interest.
Success Tips for Buying Life Insurance
- Shop around: You don’t have to accept the first offer. Shop around for the best prices and coverage.
- Consider a life insurance broker: Sometimes brokers can find you a better deal faster.
- Apply sooner rather than later: You’ll get better coverage and a better price if you buy life insurance while you’re still healthy.
- Share health improvements with your insurer: Sometimes, positive health updates result in premium adjustments, saving you money.
- Don’t hide medical conditions: Insurers usually discover the truth and could deny coverage if you aren’t forthright.
The Final Word
If you’re buying life insurance for yourself or a loved one, it’s best to buy it while you’re healthy. That’s when you’ll have the best choices and prices. However, suppose you or your loved one are already living with a severe and chronic illness like heart disease. In that case, some coverage is always better than no coverage.
Working Source List:
- Private interview with Dave Arlinghaus, life insurance broker. No attribution is required. The interview was for general information, and Dave is a professional contact of mine.
- Beth Casey (personal experience): my husband only qualifies for guaranteed whole life because of severe and chronic heart disease with heart failure. I provided the amounts insurers quoted to me when I sought coverage from several national insurers.