People with diabetes require life insurance to protect their family financial stability (mortgages, income replacement, loans, final expenses etc) and the increasing incidence of Diabetes in Canada is being reflected in the applications we are seeing as a leading life insurance broker.
When we encounter someone who has Diabetes there are a number of factors that will determine if we can arrange coverage and how much of an “extra” they will have to pay.
When thinking of life insurance and the risk of dying early, I like to think of it as pools of people. The largest pool is occupied by people who are of normal health and weight and lifestyles and the companies view them as standard risk (they will live to the average age in Canada for their current age group and sex) and they are given standard insurance rates. From there, some people are particularly healthy or have great genes and they are in a pool of people who, on average, will live longer than those in the first pool so the insurance companies charge them a bit less for their insurance. This is preferred underwriting.
People with Diabetes are in pools in the other direction and how far in the other direction will depend on a number of issues including age at onset-the older the better, type of diabetes, how long it has been controlled and current age. Generally, if the diabetes is diagnosed over age 50, it is a better than if before age 50. One of the biggest factors is smoking status-smokers are penalized if they also have diabetes If your diabetes is controlled through medication and treatment and you have a history of seeing your doctor regularly then we have found that many people with Type 2 Diabetes will qualify for traditional underwritten insurance.
The pool they are in could be as little as 50% more than the standard risk pool and some are in the standard risk pool.
So a 52 year old male who was diagnosed at age 50 with type 2 diabetes might pay $63 instead of $42 per month for $250,000 of ten year term insurance provided the diabetes is well controlled. On the other hand if he is a smoker, it would be closer to $360 instead of $118 per month which a smoker without diabetes would pay. Reducing the coverage to $100,000 reduces the premiums proportionately.
Taking another example, a 30 year old male non smoker with well controlled type 2 diabetes would be about $20 per month for $250,000 compared to $17 without diabetes. This is actually a 10 year rating but because they are young, it does not make a lot of difference. As they get older the differences will multiply and we suggest purchasing longer term insurance like T20, T30 or permanent when younger. It is important to purchase permanent insurance (eg final expense insurance0 as soon as possible as well.
A final example is a 65 year old male whose type 2 diabetes has been controlled for 4 years through medication and otherwise he is in excellent health. This person could be issued standard issue.
Many people with diabetes assume they cannot purchase traditional insurance and respond to the myriad of TV and Newspaper advertisements for guaranteed issue type insurance which is very expensive as they are jumping into a pool of people who generally have significant medical issues-frequently much more severe than they have.
It is recommended that the people with diabetes do not put off getting insurance as it will get more expensive the longer one waits and that they get an underwritten quote. Frequently, we will advise that they purchase the guaranteed type insurance to start as it is easier to purchase before they are rated or declined. We then apply for traditional underwritten insurance with a lower premium and cancel the other insurance if we can get a better offer. The company we use for the first guaranteed type insurance is accepting of what we do.
Our first step is to complete a questionnaire to obtain the details or your health which we broker to several insurance companies using only your first name to see what offers we can get. It is surprising how they can differ between companies. We then discuss this and work out the best affordable coverage.
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You can also go online, get and get a standard insurance quote at Life Insurance Quote Canada and fill in the form for more information and we will call you.