The Situation: Your term insurance policy is renewing at 400% to 600% your current premiums and you now have diabetes. What are you supposed to do?
IDC has attended and presented at numerous Disability Association meetings, which has led us to relentlessly look for alternatives to these expensive renewals. The premiums charged for insurance directly reflect the risk to the insurance company that the insured will die earlier than the average Canadian. They have been gathering the statistics on this for years. For example, for smokers, the premium is almost double the standard rate to reflect their increased mortality at earlier ages.
If your situation is similar to the one described above, here are two options at your disposal.
Option 1 – Qualify for a Traditional Insurance Policy at Standard Rates
The good news is that insurance companies have determined that some diabetics will lead a normal healthy life with normal mortality. These people will have the following:
- Diagnosed after age 50 with Type 2 diabetes
- Treated by oral medication or diet
- Have excellent compliance and blood sugar control with no complications
- No co-morbid factors, such as high blood pressure, obesity, smoking, family history issues or alcohol excess
- No complications
Option 2 – Qualify for a Simplified Issue Policy
If you don’t qualify for option 1, this second option provides much better value than the renewal rates on term life insurance policies.
Perhaps you have some variation of the points included in the list above which will increase your risk of passing on early. While the premiums will be higher, it is usually significantly less expensive than the renewal rates in most policies. For those who have their diabetes under control and are compliant with their treatment, it will be less than double the standard rate or less than what a smoker would pay. IDC has a couple of options that offer good value for people with diabetes.
If IDC has any concerns that you will be rated, we suggest starting with one of our simplified issue policies that do not require any blood or medical visit, although the application does include the standard medical questions (but no questions on diabetes). After we get this policy in place, we will then apply for a traditionally underwritten policy.
If we succeed in having a cheaper policy issued, then we will cancel the first policy. If the health issues make the traditional policy more expensive, then we keep the first policy. The danger in just going with the traditional policy first is that, if you are rated, we can no longer apply for the simplified issue policies.
Our diabetes life insurance expert welcomes a conversation with you to see what options would work best for your situation. We need to start this conversation at least three months prior to your life insurance renewal, as it can take that long to get a new policy in place (the earlier the better). The biggest delay is that they will want a report from your doctor and we have seen that take up to two months.
Finally, it is really important that you tell us all your medical issues so that we can present you with the best options designed for your situation.
Follow the link below and complete the form to request a call from our Diabetes Insurance Expert.
