Can I Qualify for Life Insurance After I’ve Become Ill?

life insurance for the sick

Life insurance is often the afterthought of insurance types primarily because it presents most of its benefits to a beneficiary rather than a policyholder. It’s for this reason that some people don’t even think about purchasing coverage until they’ve become seriously ill.

But as we all know, life insurance companies determine eligibility by risk — the greater the risk of death, the lower the likelihood that a person will be approved for coverage.

This rule presents a troubling dilemma for individuals stricken with life-threatening illnesses who don’t yet have insurance, as they’re left wondering if life insurance for the sick even exists, and if so, where can it be acquired?

Basic Life Insurance Qualifications Exclude Ill Patients

One of the toughest realities to face is news that you have acquired a terminal illness. Along with the expensive medical bills to contend with is the need to prepare for an alternate reality that involves you no longer being with your family.

Under this circumstance, one of the first thoughts to come to a person’s mind is how will my family be taken care of after I’m gone? For a person without substantial savings, life insurance is often the answer.

According to Genworth Financial, between 39 and 54 percent of people with health problems don’t have life insurance, meaning they have the difficult task of trying to acquire it while sick.

While people with any chronic illness can struggle with securing insurance, individuals who have been diagnosed with terminal illness have a harder time meeting standard life insurance qualifications.

The primary reason it’s tough for individuals with terminal illnesses to secure coverage is because life insurance eligibility and premiums are based on risk of death. When the risk of death is extremely high, many insurers don’t want to offer coverage.

Death Without Life Insurance Presents Financial Hardships

The importance of life insurance grows exponentially for individuals with terminal illnesses. If left with no substantial savings or insurance, loved ones can suffer financial challenges for years to come.

We’ve all seen the stories of families that have struggled to pay for final costs, including funeral expenses, medical bills and even debt after a person dies with no life insurance.

When breadwinners or spouses who contribute a significant portion of income die, the challenges of not having life insurance can span years and possibly even decades.

For instance, in 2010, Emily O’Donnell shared with the Pittsburgh Post-Gazette the story of her father’s death, specifically highlighting the financial struggles her family faced due to his lack of a life insurance policy.

O’Donnell and her siblings were left with the responsibility of paying for their father’s hospital bills as a cancer patient and, ultimately, his funeral expenses. She also had to put off going to college because she couldn’t afford to pay for tuition.

She’s not alone. There are countless stories of family members who have struggled to make ends meet following the death of a loved one who did not carry life insurance, making the need for coverage critical.

But how can individuals find life insurance for the sick? Is there any type life insurance for the ill out there?

Is There Life Insurance for the Sick?

When most people think about purchasing coverage, they typically consider one of two options: term life insurance or permanent life insurance.

Term life insurance is the most common and affordable form of coverage available. It covers a person over a specific number of years, assuming they pay their monthly premiums. When the term ends, the coverage expires.

Permanent life insurance differs in that it covers a policyholder over the span of a lifetime as long as premiums are paid. Permanent coverage typically encompasses three categories of insurance: whole, universal and variable life insurance.

Depending on the type of permanent life insurance acquired, policyholders could benefit from fixed premium payments over a lifetime and access to investment options that could mean cashing out a portion of the policy later in life.

Under normal circumstances, a person in good health can qualify for both types of coverage. Oftentimes, it’s difficult for older individuals to secure whole life insurance, because their risk of death increases. If they do secure coverage, it may come at a higher cost.

But for people suffering with a terminal illness, acquiring either type of coverage can be daunting at best. Luckily, doing so is not impossible.

Life Insurance for the Sick: Graded Premium Life Policies

If you have been diagnosed with a terminal illness of some type and are interested in acquiring life insurance, one option to consider is a graded premium life policy, which is a type of whole life insurance policy.

The policy is labeled “graded” because it starts with lower premiums that increase every year for a specific number of years until they level off. Also, the policy increases benefits to be paid by the year.

In most cases, premiums paid plus interest will serve as benefits for the first two years. Afterward, the full face amount is paid.

Life Insurance for Cancer Patients

Individuals who have been specifically diagnosed with cancer are typically able to acquire the same type of graded premium life insurance that other terminally ill individuals have access to.

However, it is not uncommon for cancer patients to have a more difficult time finding coverage when they are in the process of receiving treatment. It’s for this reason that experts offer a number of tips to make it easier to secure life insurance for cancer patients:

  1. Gather medical records to show detailed proof of all aspects of your diagnosis and treatment. Based on these records, insurers may conclude that you are not considered a high-risk case and may be willing to extend coverage to you.
  2. Contact multiple companies to increase your chances of both securing coverage and locating affordable premiums.
  3. Look for coverage through your employer, a professional organization, or even your credit union. Often times, insurers are more lenient when individuals have professional associations.

Another option individuals who have any life-threatening illness can consider is an insurance broker. Because their specialty is finding coverage for consumers, they may be able to point you to insurance companies that work with ill patients.

Of course, the best route to take is to secure life insurance while you’re still healthy. Once you acquire coverage and begin making payments, you’re set for your term or for life, leaving you and your family feeling comfortable that long-term financial security is no longer a concern.