10 Health Conditions on Insurers' Radar
10 Costliest Life Insurance Health Conditions
When you apply for life insurance, an underwriter will consider multiple factors before offering you a policy: your age, gender, occupation, financial status, risky pastimes, lifestyle (particularly tobacco, alcohol and drug use), face amount of the policy and your health.
Then, armed with actuarial tables drawn from the company's claims history, the underwriter will place you in a risk class based on the likelihood that you will expire before your policy matures, thus forcing the company to take a loss on you. Naturally, the higher the face value of your policy, the closer the underwriter will scrutinize your health.
Those deemed a good bet to go the policy distance may qualify for the preferred or preferred-plus rate class (that offers the best rates). Riskier applicants may only qualify for standard or substandard rates, while some individuals may be deemed too risky to insure.
Which health conditions are most likely to adversely affect your life insurance rate?
We asked Stephen Bloom, first vice president and chief underwriter for New York Life, and Jacki Goldstein, M.D., vice president and chief medical officer for MetLife's Life New Business and Underwriting to walk us through the top 10 costliest health hazards for a 40-year-old man.
High Blood Pressure: Keep a Lid on It
Just because your blood pressure has never remotely approached 120 over 80 doesn't mean you won't be offered an attractive rate on a life insurance policy.
"The industry underwrites very favorably individuals who have high blood pressure that is well-controlled and well-managed," Goldstein says. "Every company would have different criteria, but if your physician started you on some medication and it shows by a couple of readings that you're in really good control, most carriers would look at that very favorably."
Of course, that doesn't mean that the insurer won't want to take a peek under the hood, and for good reason.
"High blood pressure that's not well-controlled can lead to a lot of end-organ diseases like coronary artery disease, stroke, kidney damage, peripheral artery disease -- a lot of different vascular complications," says Goldstein.
In fact, someone with high blood pressure might even qualify for a preferred policy.
"Yes, they could," she says. "Different carriers have different categories of preferred, but yes, high blood pressure that is well-managed, most carriers would have that qualified for preferred."
Type 2 Diabetes: Youth Works Against You
Underwriters are notoriously wary of Type 2 (or adult onset) diabetes because of the toll it takes on the body's vascular system. It can lead to coronary artery disease, peripheral vascular disease, renal failure and blindness.
"It absolutely can affect risk class because there are a lot of potentially life-threatening complications that can result from diabetes," says Goldstein. "Most carriers will look through the rest of the overall application to see if there is any history of those complications that can arise as a result of the condition."
Contrary to most factors that affect life insurance rates, youth works against the Type 2 diabetic. "The younger they are, the higher the risks as they get older," says Goldstein. "If I get diabetes at age 70, I might already have coronary artery disease or a stroke anyway, so the impact of the diabetes might not affect my life expectancy in the way it might a 40-year-old. A 40-year-old is unlikely to qualify for preferred in my experience."
Bloom says the key to affordable coverage is control and management.
"We would take into consideration whether the proposed insured is under the care of a medical professional and whether the condition is well-controlled. Some conditions may require a period of time after diagnosis -- for example, six to 12 months -- before we could insure the client," he says.
Sleep Apnea: You Snooze, You Lose
Imagine having repeated episodes where you stop breathing while asleep. Or suddenly fall asleep without warning, such as when you're driving a motor vehicle.
These life-threatening health conditions, known as sleep apnea and narcolepsy, respectively, will almost certainly serve as a wakeup call for a life insurance underwriter.
Goldstein says these conditions concern insurers on two fronts.
"It's certainly the issue of daytime somnolence and motor vehicle accidents or operating any other kind of vehicle or machinery where you can endanger yourself because of the somnolence. But actually, severe sleep apnea can be associated with high blood pressure, coronary artery disease, et cetera, so it's more those associated issues that make it a risk classification matter."
That said, she has good news as well for sufferers of this rare condition.
"I don't want to say that it never affects the risk class, but even if it is a severe degree of sleep apnea, if it is well-controlled and well-managed, they can get very favorable underwriting. It's only when it is severe and untreated that it becomes a risk classification issue," she says.
Heart Disease: Insurers Fear the 'Big One'
Heart disease will always flag a life insurance underwriter for the simple reason that a massive heart attack can be sudden and deadly. But an underwriter's concern doesn't begin and end with "the big one."
"Heart disease is not one condition; it’s a conglomerate of many conditions," explains Goldstein. "Certainly, you can see coronary artery disease, but heart disease also includes prolapsed mitral valves and other kinds of alveolar heart disease as well. Each condition has to be looked at separately."
Because the severity and progression of heart disease can be difficult to document, underwriters typically take a second look at the applicant's family tree for guidance.
"Generally, this is associated with immediate family members -- father, mother, sister, brother -- who may have developed heart disease or had a stroke," says Bloom. In addition, our 40-year-old man may be asked to undergo an electrocardiogram prior to becoming insured.
Will heart disease keep you out of the preferred risk class?
"In general, coronary artery disease in a 40-year-old would usually be looked at carefully and could be something that is rated (not preferred)," says Goldstein. "If the heart has significant damage to it so that it is not pumping effectively, it could actually be a situation that is not insurable."
Asthma: Well-Managed Asthma Sufferers Can Breathe Easy
Asthma is a chronic respiratory condition in which the airways suddenly and unexpectedly constrict, causing coughing, wheezing, shortness of breath and a tightening of the chest. It is typically managed with a combination of long-term control medicine to reduce airway inflammation and short-term rescue inhalers to relieve sudden flare-ups.
"Asthma is one of those very common conditions; certainly 4-year-olds can have asthma," says Goldstein. "There are asthma deaths, but for individuals who are under good medical care, that would be a rare circumstance."
An underwriter's concern about asthma would likely rise in relation to the severity of the condition and how well it is managed. "Although we hardly ever see this, if someone who has asthma is ending up in the hospital several times a year, that would be a less favorable risk," she says.
Should an asthma sufferer aspire to a premium rate class? Absolutely, says Goldstein.
"An individual who has well-controlled asthma could well be a preferred underwriting risk. For the most part, asthma will be extremely favorably underwritten," she says.
Cancer: The Rule of Thumb is, There is No Rule of Thumb
Although the word "cancer" on an application form will flag any life insurance underwriter, its ultimate effect on an applicant's rate class can vary from negligible to substantial.
Just as each cancer is individual, every insurance company will underwrite it differently. For instance, Bloom says New York Life might take six months to a year to monitor some applicants before writing a policy, depending on the location of the cancer, the staging and type of treatment involved.
"We do underwrite cancers," Goldstein says. "There are many, many cancer histories that can be favorably underwritten and some that possibly could be preferred."
Obesity: Too Overweight to Underwrite?
There's one health hazard on our top 10 list that in one way or another can contribute to most of the other nine: obesity.
Centers for Disease Control and Prevention statistics indicate that more than one-third of adult Americans are overweight and another one-third are clinically obese. Overweight or obese people face a higher risk of heart disease, Type 2 diabetes, high cholesterol, high blood pressure, sleep apnea, stroke, arthritis and gynecological maladies.
Goldstein says insurance companies calculate an applicant's body mass index, or BMI, when determining their risk class.
"We certainly consider obesity as a health condition. Most carriers do have build tables that play into what the risk classification is in terms of what weights can qualify for the preferred classes. Some individuals who get very, very heavy could end up having rated (substandard) policies. Individuals who are very morbidly obese might not even be insurable."
Obesity isn't the only weight-related health concern. "Likewise, people who are underweight, malnourished, that is also a health condition," Goldstein says.
How might anorexia affect an applicant's rate class?
"In general, if someone has a history of anorexia, if they're in remission and their weight is more ideal, they can definitely get underwritten," says Goldstein. "But individuals who currently have active anorexia nervosa, those would be concerns."
Organ Transplants: Location, Location, Location
Organ transplants are serious business, which explains why insurance underwriters treat them on a case-by-case basis. Some insurers steer clear of organ transplants altogether, with the exception of some kidney transplants.
"It really depends," says Goldstein. "Obviously, corneal transplants would be very insurable, but the heart transplants and liver transplants haven’t been looked at quite the same as the kidney transplants."
Goldstein says most life insurers will underwrite the recipient of a kidney transplant barring any complications, in part because it's among the most routine organ transplant. "Assuming that they're recovering from their surgery, they're doing very well, they're not having any complications from the transplant, kidney transplants can be underwritten," she says.
Recipients of liver or heart transplants may not fare as well however.
"Liver and heart transplants might be insurable by some carriers, but not by many," Goldstein says. "There just hasn't been as much experience to be able to know exactly what the risk classification should look like. I would be reluctant to say that nobody is doing that, however."
Depression: Severity is Key to Rate Class
Depression is the one mental condition that can really put a damper on your life insurance rate, and for good reason: When this psychological condition becomes severe, it can lead to suicide.
"With depression, there really is a spectrum," says Goldstein. "Some can be very favorably written and even could be preferred, depending on the degree, the severity and how well it is managed. On the other end of the spectrum, if you had someone who had severe, major depression, lots of hospitalizations, lots of suicide attempts, that individual would not be rated as favorably, and possibly might not even be insurable."
Bloom says New York Life will not underwrite individuals with dementia such as Alzheimer's, people who have recently completed rehabilitation for drug/alcohol use, or those currently residing in a hospital/nursing home or facing major surgery.
Goldstein notes one other condition most life insurers would refuse to cover.
"In general, most carriers would not be underwriting HIV-positive individuals at this time."
High Cholesterol: Unhand that Cheeseburger!
While not a disease per se, high cholesterol is thought to contribute to the type of life-threatening conditions that life insurance companies like to avoid. The Centers for Disease Control estimate that 71 million, or one-third of all adult Americans, have elevated cholesterol levels, doubling their risk of heart disease.
"The concern with high cholesterol is that it is a risk factor for the development of a lot of vascular conditions, including coronary artery disease, stroke and other atherosclerotic kinds of disease," says Goldstein.
While they're not exactly keen on the condition, Goldstein says most life insurance underwriters tend to treat high cholesterol as they might high blood pressure.
"High cholesterol, if it is managed, it's going to be offered preferred," says Goldstein. "To the extent that it is well-managed and well-controlled, it can be very favorably underwritten."