Insuring Those with Diabetes
How underwriters of life, disability and long-term care consider Type I and Type II diabetes
In my practice I help people protect their family, finances and lifestyle with the strategic use of life, disability and long-term care insurance. Frequently I am asked whether someone with Type 1 or Type 2 diabetes can health qualify for these types of policies and how diabetes is evaluated by the insurance companies.
Someone with diabetes can qualify for insurance, but successfully underwriting the condition is based on a number of considerations. First is the type of insurance and how a particular company considers diabetes, some carriers may be more liberal than others with this condition. Second are the type of diabetes and the date of onset. And finally how the diabetes is being treated, the level of control and what other health issues the applicant may have.
Whether or not someone with diabetes is approved for insurance would be based on an evaluation of their individual application, medical records and lab results. However, here are some general guidelines as to how Type 2 and Type 1 diabetes may be underwritten for life, individual disability and long-term care insurance.
Type 2: A policy could be approved with as high as a “standard” (normal) health rating as long as diabetes is not a new diagnosis and it is well controlled with diet, exercise and oral medication.
Type 1: This is also an insurable condition, however a policy would be rated 4 to 6 tables. Being rated means that insured would pay a higher premium to offset the risk for a condition that could result in a reduced life expectancy. Glucose and A1C must be within normal limits and stability is key. If the diabetes is not under control it would be a decline.
Individual Disability Insurance:
Type 2: If well controlled, Type 2 diabetes can be approved with most carries. A policy would be capped with a 5 year benefit period, and there would be a 30% to 50% additional premium charge.
Type 1: This is more difficult to underwrite. There is one carrier in the market that would consider an applicant if age of onset is 25 or later and proposed insured takes no more than 40 units of insulin daily. The diabetes must be under control with no other medical issues. There would be an extra premium of 50% to 75% depending on the applicant’s age.
In most cases, Type 1/Juvenile Diabetics and those taking insulin should look for disability coverage with a carrier that specializes in sub-standard health or high occupational risk. These policies would also have a 5 year benefit period.
Long-Term Care Insurance
Long-term care insurance policies fall into two categories. One is the standalone, premium based policies that have been around for years. The other is life insurance and annuity policies with long-term care benefits built in or added as a rider, these are called linked benefit or hybrid policies.
Type 2: This can be an insurable condition with most carriers for standalone and hybrid policies. Oral medication is acceptable and the diabetes must be well controlled. The applicant must have no other serious conditions such as heart disease, peripheral vascular disease, amputation, retinopathy, kidney disease or stroke. There can be no tobacco use in the last 5 years.
Type 1 or insulin use: This is not an insurable condition for standalone policies on an individual basis. Through their employer however, as part of an employer sponsored LTC plan with simplified (minimal) underwriting, someone with Type 1 may be able to qualify for coverage. And, there is at least one linked benefit carrier that will issue long-term care coverage to someone with Type 1. Approval would be based on how well the diabetes is controlled with insulin, diet and exercise, and if there are no other co-morbid conditions.
When applying for an individual life, disability or long-term care insurance, it is important to work with an agent who can do preliminary underwriting and shop the market and on your behalf. This means talking with the underwriting departments of multiple insurance companies prior to submitting your formal application. This will increase the likelihood of a policy being issued with the best pricing for your situation.