How to Get Life Insurance When You Are Sick

by Deb Katula ; Updated July 27, 2017
Looking out for your family

Life insurance provides reassurance that your family will be financially provided for under the unfortunate incidence of an untimely death. Funds from life insurance distributions can be used to pay off expensive medical bills, funeral expenses as well as daily living expenses. Typical life insurance policies are purchased by young healthy adults. Often though, other unforeseen needs arise due to changes in family situations, or even critical illness. Even if you are not the perfect picture of health, there are many life insurance options available to protect you and your family.

Step 1

Wade through the different types of policies to select the insurance that is right for you. Determine how much life insurance you will need. There are online life insurance calculators, such as Lifehappens.org, available to assist you in this process (see Resources). The final cost of this life insurance policy is then based on risk factors surrounding your current age, gender and health. As you grow older, life insurance becomes more costly. Most life insurance firms require medical tests to determine your overall medical health. If you are deemed healthy, your rates will be lower. If you are not considered healthy, these rates will increase. Life insurance companies can determine you are too great of a risk and refuse to provide you with a life insurance policy. Rather than outright refusing you access to life insurance, most firms will charge an extremely high policy rate to offset their risk.

Setting specific terms for your life insurance policy is another way an insurance company may offer you an insurance policy. For example, if you have a serious pre-existing heart condition, they may insure your life against everything but a heart disease-related death.

Step 2

Elect to obtain life insurance coverage through an insurance company that does not require a health exam. There are several insurance companies that claim they will provide life insurance for anyone with no medical questions, just the requirement of paying the premium. These policies most likely will have more limitations on the type of conditions on which they will pay out the life insurance policy. You can find examples of these types of policies at Equote.com (see Resources).

Step 3

Do not conceal your true health history to a life insurance company when purchasing a policy. You may lower your premiums over the short run, but this is not a wise idea. The insurance company will most likely investigate the details of your condition prior to paying out any death benefits. Merely by contacting your physician, the insurance company can determine if you had a serious pre-existing condition of which they were unaware. If the insurance company determines you did not fully disclose details of your health when purchasing a policy, your policy will no longer be valid. In this case, no funds will be paid out.

Step 4

Do not limit yourself to life insurance companies that do not require health examinations. Health is not a deciding factor on whether or not you are eligible to obtain insurance, but it may limit your options. Even insurers that require a health exam should be able to offer you some type of life insurance plan.

Step 5

See if you qualify for critical illness life insurance. This type of life insurance policy is generally taken as a supplement to standard life insurance policies. You can elect to purchase this type of policy from any providing life insurance company. AFLAC is one of the more well-advertised life insurance agencies providing these types of policies. Critical illness life insurance policies can be taken out whether you are healthy or critically ill. The payout for this policy comes in one lump sum and can be used for almost anything, from paying medical bills to taking a long vacation.

Tips

  • Life insurance calculators are a useful way to estimate your future insurance needs. These calculators ask you to plug in specific financial information to estimate your future cost of living needs. They are also helpful in that they provide information on unexpected places where you may require future income, such as college expenses for your children. An example of a life insurance calculator can be found at Lifehappens.org (see Resources). This calculator is provided by LIFE, a not-for-profit insurance information group.

Warnings

  • There is always a risk of taking out too much or too little life insurance. The figures you determine are your best estimate of what you will need, not a precise science. Use a reputable insurance agent to determine the amount of life insurance you will need and the types of insurance available. But in the end, remember, you are the one who makes the final insurance selection. Insurance agents are there to be your advocate, but they are also there to profit for themselves.

    This is for information purposes only. Always consult with your tax or financial professional before making large investments or changes in your financial strategy.

About the Author

Deb Katula has written and researched for Societe Generale, FIMAT, Nikko Securities, Chicago Mercantile Exchange and Arthur Anderson. She holds an MBA in economics and finance from the University of Chicago; a Japanese language fellowship from Harvard; and a Bachelor of Arts in business/psychology/Asian studies from Augustana College.

Photo Credits

  • morguefile.com