Living with a pre-existing medical condition can be challenging, and securing life insurance may seem daunting. The good news is that having health issues does not necessarily preclude you from obtaining coverage. Many Canadians with pre-existing conditions are still able to secure life insurance policies that protect themselves and their loved ones.
We will delve into the intricacies of pre-existing conditions, explore the various policy options available, and provide expert insights and real-life examples to help you make informed decisions.
By the end of this guide, you will be well-equipped to take control of your life insurance journey and secure the coverage you deserve.
What is a Pre-existing Condition?
In the context of life insurance, a pre-existing condition refers to any injury, illness, or disease you were diagnosed with or treated for before applying for life insurance.
These conditions can range from minor health issues to more severe chronic illnesses. Common examples of pre-existing conditions that can impact life insurance eligibility and premiums include:
- Cardiovascular conditions: Heart disease, stroke, hypertension, high cholesterol
- Cancer: All types and stages
- Diabetes: Type 1, Type 2, and gestational diabetes
- Respiratory conditions: Asthma, chronic obstructive pulmonary disease (COPD), sleep apnea
- Mental health disorders: Depression, anxiety, bipolar disorder, schizophrenia
- Neurological conditions: Multiple sclerosis, Parkinson’s disease, Alzheimer’s disease
- Autoimmune disorders: Rheumatoid arthritis, lupus, and inflammatory bowel disease
- Chronic kidney or liver disease
- Obesity and eating disorders
- HIV/AIDS
- Hepatitis B or C
Note that the definition of a pre-existing condition may vary slightly among insurance providers. When applying for life insurance, it is your responsibility to disclose any pre-existing conditions. Failing to do so is considered fraud and can result in the denial of a future claim or the cancellation of the policy.
Can You Get Life Insurance with Pre-Existing Conditions in Canada?
Yes. You can still obtain life insurance if you have a pre-existing health condition. However, insurers view pre-existing conditions as a higher risk when underwriting life insurance policies. This can make approval more challenging and may result in higher premiums compared to applicants without health concerns.
The extent of the impact depends on several factors, including:
- Type and severity of the condition
- Age at diagnosis
- Treatment history and efficacy
- Stability and control of the condition
- Overall health and lifestyle factors
Insurers use this information to classify your condition as mild, moderate, or severe and determine the impact on insurability risk. Applicants with severe pre-existing conditions typically only qualify for guaranteed or simplified issue policies with strict limits. Traditional coverage is very expensive or unavailable.
How Do Pre-existing Conditions Affect Life Insurance Cost?
The cost of life insurance varies based on the severity of your health condition:
- Mild: Minimal symptoms, well-managed with medication or lifestyle, low mortality risk (e.g., controlled high blood pressure, well-managed asthma). Applicants may qualify for standard or near-standard rates.
- Moderate: Manageable symptoms, but the condition presents ongoing challenges (e.g., Type 2 diabetes, anxiety disorders, early-stage cancer in remission). Applicants often face rated premiums.
- Severe: Significant impact on health and quality of life, high mortality risk (e.g., advanced heart disease, end-stage liver/kidney failure, late-stage cancer). Applicants typically only qualify for guaranteed or simplified issue policies.
For milder pre-existing conditions like controlled high blood pressure, asthma, or managed mental health issues, you may only see a slight premium increase, if any. More severe illnesses like late-stage cancers often lead to denial of traditionally underwritten policies or exceptionally high premiums that may be unaffordable.
Understanding Rated Premiums and Table Ratings
When an insurer determines you are a higher-than-average risk, they may offer you a “rated” policy. This means you will pay a higher premium than a healthy individual. This is often done using a Table Rating System.
- Standard Rate: The baseline premium for a healthy person.
- Table Ratings: These are percentage increases on top of the standard rate. They are typically represented by letters (A, B, C…) or numbers (1, 2, 3…).
- Table A (or 1): Standard premium + 25%
- Table B (or 2): Standard premium + 50%
- Table C (or 3): Standard premium + 75%
- Table D (or 4): Standard premium + 100% (double the standard rate)
- …and so on, up to Table H (or 8) or higher.
An underwriter will assign you a table rating based on the severity and management of your pre-existing condition.
Illustrative Premium Examples with Pre-Existing Conditions
The following table provides estimated annual premium ranges for a 40-year-old non-smoking male seeking a $400,000, 20-year term policy. These are for illustrative purposes only. Your actual premium will vary based on your specific medical history, lifestyle, the insurer, your province, and the full underwriting assessment.
| Pre-Existing Condition | Estimated Annual Premium Range |
|---|---|
| No Known Conditions (Preferred) | $450 – $550 |
| Well-Controlled High Blood Pressure | $550 – $700 |
| Type 2 Diabetes (Well-Managed) | $800 – $1,100 |
| Anxiety (Mild, Well-Managed) | $600 – $750 |
| Depression (Mild, Well-Managed) | $650 – $800 |
| Arthritis | $500 – $650 |
| Sleep Apnea (with CPAP compliance) | $525 – $700 |
| Stroke History (minor, over 5 years ago) | $900 – $1,500+ |
| Early Stage Breast Cancer in Remission (5+ years) | $950 – $1,600+ |
| HIV Positive (Well-Managed, Undetectable) | $1,200 – $2,500+ (may require reduced coverage) |
| Congestive Heart Failure (CHF) | Coverage with traditional plans is unlikely |
As shown, mild conditions like high cholesterol may add little to no premium increase, while severe illnesses like CHF can make coverage impossible, with many scenarios in between.
Types of Life Insurance for Individuals with Pre-existing Conditions in Canada
While traditionally underwritten policies may be limited or cost-prohibitive, several life insurance options exist for pre-existing conditions:
Term Life Insurance
Term life insurance provides coverage for a specified period, typically ranging from 10 to 30 years. It is an attractive option for those seeking affordable coverage to protect their loved ones during crucial life stages, such as while raising children or paying off a mortgage.
Individuals with mild to moderate, well-managed conditions can often qualify for rated term life insurance. Premiums for term policies are generally lower than those for permanent life insurance, making it a budget-friendly choice.
| Policy Feature | Details |
|---|---|
| Approval | Full health exam and medical questions required |
| Death Benefit | Up to $5 million |
| Premiums | Can be standard, but often rated for pre-existing conditions |
Permanent Life Insurance
Permanent life insurance, such as whole life or universal life, provides lifelong coverage and includes a savings component known as cash value. A trade-off for these advantages is that it typically comes with higher premiums compared to term insurance.
For individuals with pre-existing conditions, the underwriting process for permanent policies may be more stringent, and premiums may be higher to account for the increased risk.
| Policy Feature | Details |
|---|---|
| Approval | Full health exam and medical questions required |
| Death Benefit | Up to $5 million; Lifelong coverage; Living benefits riders |
| Premiums | Higher than term; Rated premiums for pre-existing conditions |
Simplified Issue/No Medical Life Insurance
Simplified issue life insurance offers a streamlined application process that typically does not require a medical exam. Instead, applicants are asked to answer a series of health-related questions. It’s a middle ground for those who may not qualify for a traditional plan but often come with higher premiums and lower coverage amounts compared to fully underwritten policies.
| Policy Feature | Details |
|---|---|
| Approval | No medical exam, but you must answer “no” to several key health questions |
| Death Benefit | Typically capped between $25,000 and $500,000 |
| Premiums | More expensive than fully underwritten policies, cheaper than guaranteed issue |
Guaranteed Issue Life Insurance
Guaranteed-issue life insurance is a type of policy that offers coverage without a medical exam or health questionnaire. As the name suggests, approval is guaranteed, regardless of your health status. This is the last resort for individuals with severe pre-existing conditions who have been declined for other types of life insurance.
Guaranteed issue policies typically have lower coverage amounts and higher premiums and may include a waiting period (usually two to three years) before the full death benefit is payable. If the insured passes away during this period, the beneficiaries may only receive a refund of the premiums paid plus interest.
| Policy Feature | Details |
|---|---|
| Approval | Guaranteed |
| Death Benefit | Low coverage amounts, usually capped at $25,000 or $50,000 |
| Premiums | The most expensive option |
Group Life Insurance
Group life insurance is a policy that employers or associations offer to their employees or members. This coverage is typically part of an employee benefits package and may not require a medical exam or extensive health questions.
For individuals with pre-existing conditions, group life insurance can be an accessible way to obtain coverage without undergoing individual underwriting. However, group policies often have lower coverage amounts and may not be portable if you leave your employer or the association.
Best Life Insurance Companies For Pre-Existing Conditions in Canada
If you have a pre-existing condition, partnering with the right insurance company can make finding affordable coverage easier. Based on reputation and expertise with high-risk cases, here are the top insurers in Canada to consider:
Manulife Insurance – Offers competitive rates on term life insurance for many managed health conditions. Known to be more lenient with certain impairments.
Sun Life – Specializes in permanent life insurance for diabetics and those with cardiovascular issues. Also accommodating for HIV-positive applicants.
RBC Insurance – Leading provider of disability insurance and critical illness insurance for Canadians with pre-existing conditions. Also offers competitive life insurance rates.
Industrial Alliance – Expertise with simplified issue life insurance for applicants unable to get traditional policies. Wide variety of living benefits.
Canada Life – Known for affordable life insurance rates for seniors and applicants with common managed conditions like high blood pressure.
ivari – Competitive for life insurance applicants with diabetes, sleep apnea, and high blood pressure. Good permanent life insurance options.
Foresters Financial – Known for lenient underwriting for diabetes, Crohn’s disease, and some heart conditions.
Equitable Life – Specializes in impairment-rated life insurance policies with accommodating guidelines for various conditions.
Empire Life – Strong reputation for accommodating mental health issues and being flexible on HIV positive applicants.
Every situation is unique, so speak to an expert advisor to determine which company may best fit your needs. Get a free quote today from Canada’s top brokers at Lifebuzz to start exploring your options. Our licensed professionals have helped thousands of Canadians with pre-existing conditions find the right coverage at the best rate. Don’t delay – get the life insurance you need to protect your loved ones.
Navigating the Life Insurance Application Process
Before applying for life insurance, gathering all relevant medical information and familiarizing yourself with your pre-existing condition is essential. This includes:
- Diagnosis details, including date of onset and severity
- Treatment history, including medications, surgeries, and other therapies
- Current management plan and prognosis
- Recent test results and medical reports
This readily available information will streamline the application process and demonstrate to the insurer that you are proactive in managing your health.
Disclosing Pre-Existing Conditions
Honesty and transparency are crucial when applying for life insurance. You must disclose all pre-existing conditions and any other relevant health information to the insurer. Failing to do so can result in the denial of coverage, cancellation of your policy, or refusal to pay the death benefit to your beneficiaries.
Remember that insurers can access various medical databases, such as the Medical Information Bureau (MIB), and request medical records from your healthcare providers. Therefore, any attempt to conceal or misrepresent your health status will likely be discovered, jeopardizing your coverage.
The Underwriting Process
Once you submit your life insurance application, it will undergo underwriting. During this process, the insurer will review your application, medical records, and any additional information requested to assess your risk profile and determine your eligibility for coverage.
For individuals with pre-existing conditions, the underwriting process may involve:
- Medical questionnaire: You will be asked to provide detailed information about your health history, including diagnoses, treatments, and medications.
- Medical records: The insurer may request access to your medical records to verify the information provided and understand your condition comprehensively.
- Medical exam: Depending on the type of policy and the severity of your condition, you may be required to undergo a medical examination, which can include blood tests, urinalysis, and other diagnostic assessments.
- Physician’s statement: In some cases, the insurer may request a statement from your treating physician to obtain further details about your condition, treatment plan, and prognosis.
The underwriting process can take several weeks to a few months, depending on the complexity of your case and the responsiveness of your healthcare providers in submitting the requested information.
Strategies for Securing Favourable Life Insurance Coverage
Here are the most effective strategies for a successful application:
Managing Your Pre-Existing Condition
One of the most effective ways to improve your chances of securing favourable life insurance coverage is to manage your pre-existing condition proactively. This involves:
- Adhering to your prescribed treatment plan
- Attending regular check-ups and screenings
- Maintaining a healthy lifestyle through diet, exercise, and stress management
- Keeping detailed records of your medical history, including test results and treatment progress
By demonstrating that you are actively managing your health, you can present a more favourable risk profile to insurers, potentially leading to better coverage options and lower premiums.
Timing Your Application
The timing of your life insurance application can also impact your chances of securing favourable coverage. Suppose you have recently been diagnosed with a pre-existing condition or have undergone treatment. In that case, it may be beneficial to wait until your condition has stabilized and you have established a track record of effective management before applying.
In some cases, insurers may offer more favourable terms and premiums if a certain period has passed since your diagnosis or treatment. For example, some insurers may offer standard rates to cancer survivors in remission for several years.
Exploring Specialized Programs
Some life insurance companies in Canada offer specialized programs or policies designed specifically for individuals with certain pre-existing conditions. These programs may have more lenient underwriting guidelines or offer coverage without a medical exam. Your broker can help you identify and explore specialized programs that may suit your specific condition.
Considering Alternative Policy Structures
If traditional life insurance policies prove challenging to secure or are cost-prohibitive due to your pre-existing condition, consider exploring alternative policy structures. These may include:
- Graded death benefit policies: These policies offer a lower death benefit during the initial years of the policy, which gradually increases over time. This structure can make coverage more accessible and affordable for individuals with pre-existing conditions.
- Joint life insurance: If you have a spouse or partner, consider a joint life insurance policy. This type of policy covers two individuals under a single contract and can be more cost-effective than separate policies. The underwriting process may be more favourable if one partner has a pre-existing condition, as the risk is spread across both individuals.
- Rider options: Some life insurance policies offer riders, additional benefits that can be added to the base policy. For example, a waiver of premium rider can ensure that your policy remains in force without requiring premium payments if you become disabled and unable to work. Exploring rider options can help tailor your coverage to your needs and circumstances.
Working with a Life Insurance Broker
Navigating the life insurance landscape with a pre-existing condition can be complex and overwhelming. Working with an experienced life insurance broker specializing in helping individuals with health challenges can significantly improve your chances of securing suitable coverage.
A knowledgeable broker can:
- Help you understand your options and identify policies that best fit your needs
- Assist in gathering and organizing the necessary medical documentation
- Advocate on your behalf with insurers to secure the most favourable terms and premiums
- Provide guidance and support throughout the application and underwriting process
When selecting a life insurance broker in Canada, look for someone with a proven track record of success helping clients with pre-existing conditions. Ask for references and read reviews to ensure you work with a reputable professional with your best interests in mind.
You can also contact professional associations, such as the Canadian Life and Health Insurance Association (CLHIA) or the Independent Financial Brokers of Canada (IFB), for recommendations.
Success Stories: Real-Life Examples of Securing Life Insurance with Pre-Existing Conditions
Case Study 1: John’s Journey
John, a 45-year-old, was diagnosed with type 2 diabetes. He worked with his doctor to manage his condition through medication and lifestyle changes. When applying for life insurance, he worked with a broker who specialized in high-risk cases. By presenting a strong case with detailed medical records showing excellent control of his A1C levels, John secured a 20-year term policy with a 50% premium increase, which was a great outcome.
Case Study 2: Emily’s Triumph (Congenital Heart Defect)
Emily, a 30-year-old, was born with a congenital heart defect. She was worried she’d be uninsurable. Her broker identified an insurer known for its expertise in cardiovascular risks. After submitting detailed records from her cardiologist showing her condition was stable and required no further intervention, Emily underwent a medical exam. She successfully secured a permanent life insurance policy with a moderate rating, giving her peace of mind for her daughter’s future.
What to Do If Your Application is Denied
A denial is not the end of the road. Take these steps:
- Request the Reason in Writing: The insurer is obligated to tell you why you were declined. This information is critical for your next steps.
- Request Your MIB Report: You are entitled to a free copy of your Medical Information Bureau (MIB) file. Review it for any errors or outdated information that may have contributed to the denial. If you find errors, work to have them corrected.
- Consult Your Broker: Discuss the denial with your broker. A good broker will analyze the reason and devise a new strategy. This might involve
- Applying to a Different Insurer: No two insurance companies underwrite the same way. Another insurer might be more lenient with your specific condition.
- Applying for a Different Product: If you were denied a traditional policy, a simplified issue policy may be the next best option. If your condition is severe, guaranteed issue is a viable path to securing some coverage.
If the denial was due to poor control of a condition (e.g., high A1C, unstable blood pressure), focus on improving your health for 6-12 months. A new application that shows better management can yield different results.
Frequently Asked Questions
What are some tips for saving money on life insurance with pre-existing conditions?
Some strategies for reducing costs include applying at a younger age before premiums rise, proactively improving your health, choosing term life insurance, using policy riders judiciously, leveraging group/work policies, and partnering with a specialized broker to find you the best rates.
Should I just try hiding my pre-existing condition from the insurer?
No, you should never hide health information on a life insurance application, as it constitutes fraud. In addition to claims being denied later, your policy can be cancelled retroactively, and you may be prohibited from receiving any future coverage.
What are some good life insurance companies for pre-existing conditions?
Some life insurers known to be more accommodating of certain pre-existing health conditions include Manulife, RBC Insurance, Sun Life, Canada Life, Industrial Alliance, and Great West Life. A knowledgeable adviser can help guide you.
Can you get life insurance with a pre-existing condition in Canada?
Yes, it is possible to get life insurance with a pre-existing condition. However, the type of policy, coverage amount, and premium rates may vary depending on the severity and control of your condition.
What is considered a pre-existing condition for life insurance?
A pre-existing condition is any medical condition, illness, or injury that you have been diagnosed with, treated for, or experienced symptoms of prior to applying for a life insurance policy. Examples include diabetes, heart disease, cancer, and mental health disorders.
How do life insurance companies know if you have a pre-existing condition?
Life insurance companies typically require you to complete a medical questionnaire and may request access to your medical records. They may also ask you to undergo a medical examination to assess your current health status.
Can I be denied life insurance because of a pre-existing condition?
Yes, it is possible to be denied life insurance due to a pre-existing condition. However, many insurers offer alternative policy options, such as guaranteed issue or simplified issue life insurance, which may provide coverage without a medical exam or extensive health questions.
What types of life insurance are available for people with pre-existing conditions?
The types of life insurance available for people with pre-existing conditions include term life insurance, permanent life insurance, simplified issue life insurance, guaranteed issue life insurance, and group life insurance. Each type has its own set of pros and cons, and the best option depends on your specific situation
How does having a pre-existing condition affect life insurance premiums?
Having a pre-existing condition can result in higher life insurance premiums compared to those offered to individuals without health concerns. The severity of your condition, how well it is managed, and the type of policy you're seeking will all play a role in determining your premium rates.
What is the best life insurance for pre-existing conditions?
The best life insurance for pre-existing conditions depends on your specific health situation and needs. Working with an experienced life insurance broker who specializes in helping individuals with pre-existing conditions can help you identify the most suitable policy options.
What is a guaranteed issue life insurance policy?
A guaranteed issue life insurance policy is a type of coverage that does not require a medical examination or health questionnaire. Approval is guaranteed, regardless of your health status, but these policies typically have lower coverage amounts, higher premiums, and may include a waiting period before full coverage takes effect.
Can I get term life insurance with a pre-existing condition?
Yes, you can get term life insurance with a pre-existing condition. However, the approval process may involve more extensive underwriting, and premiums may be higher compared to those for individuals without health issues, depending on the severity and control of your condition.
Can I get whole life insurance with a pre-existing condition?
Yes, you can get whole life insurance with a pre-existing condition. Similar to term life insurance, the underwriting process may be more extensive, and premiums may be higher. Some policies may also have exclusions or limitations related to the pre-existing condition.
How can I improve my chances of getting life insurance with a pre-existing condition?
To improve your chances of getting life insurance with a pre-existing condition, be proactive in managing your health, follow your treatment plan, and maintain a healthy lifestyle. Working with an experienced insurance broker and being transparent about your health history can also help you navigate the application process and find the most suitable policy for your needs.
Should I disclose my pre-existing condition when applying for life insurance?
Yes, it is crucial to disclose any pre-existing conditions when applying for life insurance. Failing to disclose a known health issue can result in the denial of coverage or the cancellation of your policy if the insurer discovers the omission later.
What happens if I don't disclose a pre-existing condition on my life insurance application?
If you don't disclose a pre-existing condition on your life insurance application and the insurer discovers the omission later, they may deny your coverage, cancel your policy, or refuse to pay the death benefit to your beneficiaries. It is essential to be honest and transparent about your health history to ensure the validity of your coverage
Can a life insurance company cancel my policy if I develop a pre-existing condition after I'm insured?
Generally, a life insurance company cannot cancel your policy if you develop a pre-existing condition after you're insured, as long as you were honest about your health history during the application process. Once your policy is in force, the insurer is obligated to honor the terms of the contract.
How does smoking affect life insurance rates for people with pre-existing conditions?
Smoking can significantly affect life insurance rates for people with pre-existing conditions, as it is considered an additional risk factor. Smokers typically face higher premiums compared to non-smokers, and this difference can be even more pronounced for individuals with pre-existing health issues.
What should I do if I'm denied life insurance because of a pre-existing condition?
If you're denied life insurance because of a pre-existing condition, don't give up. Consider working with a different insurance broker who specializes in helping individuals with pre-existing conditions, as they may be aware of alternative policy options or specialized programs that suit your needs. Additionally, explore different types of policies, such as guaranteed issue or simplified issue life insurance, which may have more lenient underwriting requirements.
The Bottom Line
While pre-existing health conditions make obtaining life insurance more complex, coverage is accessible for most Canadians with the right guidance. By proactively managing your health and understanding your options, you can secure the coverage you need to protect your loved ones. A licensed broker can help you compare options and find the right type of coverage for your needs.