Life insurance companies are all about managing risk. All life insurance premiums are based on actuarial tables designed to determine how much of a risk each illness or life style choice will lead to an early death. Many people already know that illnesses such as cancer, stroke, heart disease and diabetes may cause them to have higher rates or even be uninsurable, but there are other illnesses and diseases that insurance companies take into account when determining coverage. This is a list of the top ten most common diseases that cause death in Canada and how surviving these diseases or being at risk for them affects insurance coverage.
1. Cancer– Cancer is a catch all term for a wide family of diseases, each one different from the other. Some are genetic, passed down through families, others such as mesothelioma (caused by breathing in asbestos fibers) are caused by exposure to chemicals called carcinogens or radiation, and others are mutagenic, caused by defects in a person’s DNA. Because of the high rate of cancer, many insurance policies will ask questions about family history or if the person being insured has ever had cancer. Depending on the type of cancer, even if the cancer is cured there can be a high risk of it returning. As this article points out, coverage can vary depending on the insurance quoting company and the type of cancer.
2. Heart disease– According to this article from the National Post, in 2007, heart disease accounted for 22% of deaths in Canada. Thanks to medical technology, the likelihood of someone passing away from heart disease decreases every year, but because heart disease is a serious chronic illness with many side effects, depending on a person’s age, weight, smoking history, etc. insurers will be taking a deep look into the person’s family to determine how large of a risk it is. Depending on the severity, the person may not be able to find coverage.
3. Stroke– A stroke is a sudden loss of brain function, usually caused either by blood not being able to flow to the brain or a vein or artery bursting inside the brain. When a stroke occurs, the person can suffer permanent brain damage and may be at risk of further strokes developing. Depending on the severity of the stroke, traditional insurance policies may not insure the person.
4. Chronic lower respiratory illnesses – These account for 4.5% of deaths in Canada and include illnesses such as chronic obstructive pulmonary disease, or C.O.P.D., asthma, and more. Managed right, lung diseases such as asthma may be insurable, with managed asthma seen as a favorable risk.
5. Diabetes – Diabetes is a disease that many insurers may be leery about. Those applying who suffer from this disease may be asked to submit to additional medical tests or may not be able to find coverage. Again, like many of the diseases on this list it depends on a lot of factors; a person who develops it at 20 will be looked at as a higher risk than if they developed it at 60, because closer to the end of life the odds are greater that it may be another illness or disease that causes them to pass away. The type of diabetes as well as how it is being managed and the person’s health and family history will be looked at.
6. Alzheimer’s Disease- Alzheimer’s disease is one with many unknowns. While recent developments suggest that there are both genetic and environmental factors that play into the development of this disease, much is still unknown and there is no cure as of yet. It affects people differently, with some people developing it in their 40’s and others in their 90’s. It can take years to progress or months. If this is in your family history, expect that insurers will ask more questions about this.
7. Influenza – Out of all of the diseases on this list, this is one that most insurers do not concern themselves with. As influenza is an acute disease, in most cases if a person survives it and does not have a compromised immune system, there are no lasting effects on health.
8. Pneumonia- While, like influenza, pneumonia is survivable in most cases depending on the person, there can be some lasting damage and it may be something that insurers ask about.
9. Kidney disease- Kidneys are an essential part of the body’s filtration system and if there is a history of kidney disease in your family or if you have survived it or received a kidney transplant, it is important to let your broker know before the application process starts as there are some companies that may declined people automatically and others who allow some transplants.
10. Suicides- While suicides themselves are not a disease, mental health diseases such as depression and schizophrenia, among others, may cause a person to take their own life. According to recent statistics, up to 20% of Canadians will experience mental illness sometime in their lifetime. If a person has a pre-existing diagnosis for these disorders or has attempted suicide in the past, even if they obtain coverage, if they commit suicide within a certain period (generally two years), their policy may be voided.
If you are looking for coverage and have one or more of these diseases or have a family history of them, another alternative to traditional life insurance plans are no medical life insurance plans. There are two types of these policies: guaranteed issue and simple issue plans. Guaranteed issue insurance quotes that have no medical questions or exams on the application, whereas simplified issue quotes mean no medical exams but may have a short list of questions. Insurers are able to offer no medical life insurance plans because the premiums on these plans are generally a bit higher than traditional life insurance plans, additionally, the death benefit amount may be smaller.
There are many factors that go into determining who can get coverage and who cannot, and insurers take factors such as family history and pre-existing conditions seriously.