Did you know that you could qualify for life insurance even if you have diabetes? Janette Rooney tells us more.
If you have a financial advisor, he/she needs to be fully informed about your health and financial status to apply for life insurance for you. Your financial advisor will then conduct a financial needs analysis to ascertain what type of cover you require and how much cover you require under each element.
If you do not have a financial advisor, you, as the client, would deal directly with the insurance company regarding the new business requirements and adverse offers. You don’t have to have a financial advisor, but it’s always better to utilise one as you would be given best advise by an expert who conducts a financial needs analysis. Plus, a financial advisor often negotiates with the insurance companies regarding adverse decisions, as they have the knowledge of the product and the client.
Types of cover
Here are a few examples of the types of cover available:
Lump sum amount payable in the event of a person’s death. Usually this cover is taken out to cover any financial impact of the person dying:
- Estate Duty
- Executors Fees
- Replace lost income of the person dying for a specific period of time.
Lump sum amount payable in the event of a client being disabled.
- Revamping of clients lifestyle post disability
- Apparatus, such as wheelchairs.
- Modifying vehicle changing to an automatic vehicle.
- Modifying changes to house, for example, changing a bathroom.
Monthly income replacement in the event of a disability.
Lump sum amount payable in the event of a server illness, such as cancer.
When it comes to initially applying for life insurance, various initial factors are taken into consideration when generating a life quote, such as age, sex, income, education and smoker status. The initial quote is usually generated with what is called an A1 rating, which is a “healthy life” rating.
The next step is to complete the application form with your financial advisor, where most life insurance companies require full medical history. This is the most important element and it is vital to disclose all health information.
The application form is submitted through to the life insurance companies underwriting team. The application is assessed based on the various risk factors disclosed. The underwriters will then generate a list of requirements. The type of requirements generated would depend on each client’s individual health status.
For people living with diabetes, again depending on the type, the life insurance companies would usually call for glycated haemoglobin (HbA1C) blood test. Depending on the results of this blood test and any other tests required, if the client has any other high-risk health conditions, the life insurance company would then decide on whether to offer the client cover.
Should cover be offered, the offer could be subject to terms and conditions. For example, the premium being loaded, certain ancillary benefits (Disability, Severe Illness and Income Protection) may not be offered, or offered subject to certain exclusions, such as dread disease.
If the life insurance company is not prepared to offer life insurance, some companies are prepared to offer accidental life insurance cover, where you could be covered as the result of accidental death. There are also some life insurance companies who specialise in higher risk clients and it would be best to contact your financial advisor to get guidance in this regard.
Note to remember
All of the insurance companies that I deal with will offer quotes to clients who have diabetes. These include Momentum Life, Discovery Life, Hollard Life, Old Mutual and Brightrock. However, I have had different diabetic clients accepted and other clients declined by the same insurance company. This is because each client is unique and their factors are different compared to the next one.
Remember, the life insurance company would look at the overall health of the client; what type of diabetes the client has; how controlled the diabetes is. This is determined, for example, by blood tests conducted prior to the company making a decision. Lastly, does the client have any other conditions besides diabetes and how much risk does the other conditions impose? All those factors determine the decision.
Diagnosed after commencement of life insurance
If the client’s health status changes after taking out life insurance, it is always recommended to advise the life insurance company from a disclosure perspective. However, the underwriting was conducted at application stage in accordance with the client’s health status when the cover was taken out. The premiums and conditions cannot be changed due to additional conditions contracted after cover commencement date. The premiums and conditions of cover can be amended when the client adjusts their cover i.e. increases the cover or adds additional cover.
The life insurance companies usually request a health review and depending on the updated health conditions can then underwrite in terms of increasing the premium or exclusions, etc.
MEET OUR EXPERT
Janette Rooney is an independent financial advisor and owns her own brokerage, Le Forge Financial Consultants. She started her career, in 1993, in the medical aid industry, working for Medscheme and then for Discovery.