What You Need To Know About Life Insurance With Pre-Existing Medical Conditions

Hectic routines, rising pollution levels, lack of sleep, and inadequate nutrition… there are several reasons leading to an increase in the number of serious illnesses today. What is surprising is that a large chunk of individuals getting afflicted with these illnesses belongs to the younger generation. Getting diagnosed with serious ailments at an early age can lead to severe problems later on, one of which is having difficulties obtaining a life insurance policy. People with pre-existing conditions may go through a different procedure to buy life insurance when compared to regular buyers.

What are “pre-existing conditions”?

The IRDAI (Insurance Regulatory and Development Authority of India) defines “pre-existing conditions” in the context of insurance in the following terms: any condition, ailment, or injury or related condition (s) for which the insured person had signs or symptoms and/or was diagnosed, and/ or received medical advice/ treatment, within 48 months prior to the first policy issued by the insurer and renewed continuously thereafter.

Not all conditions that you have can be considered pre-existing conditions. For instance, if you are prone to cold and cough on a regular basis, then it may not have that big of an influence on the purchase of your life insurance policy.

Now, what is life insurance?

Life insurance is a kind of insurance policy that provides the assurance of a pre-decided sum assured to the nominee/s when the policyholder passes away. This sum assured is provided given that the policyholder passes away under the conditions prescribed in the policy. The policyholder has to pay a specified amount in a lump sum or during regular intervals known as the premium throughout the policy duration.

It is not enough to know what is life insurance, one should also know that there are various kinds of life insurance policies, such as Unit Linked Insurance Plans or ULIPs, term life insurance, group life insurance plans, and many more. There are several riders, such as critical illness benefit rider, waiver of premium, income benefit, and so on, that can be bought with your policy to increase its coverage.

The effect of pre-existing conditions on insurance premium

The insurance company takes several factors into consideration, such as the age of the policyholder when calculating the premium for a particular policyholder. Thus, the health conditions of the policyholder also play a huge role. If you are suffering from a pre-existing disease, then you will have to incur a higher premium than others. This is because those with serious ailments hold greater risk for the insurers than those who are completely healthy.

If the illness you are afflicted with is terminal, then it may be a bit more than difficult to get a life insurance policy. The increase in premium may also depend on the kind and severity of the illness. For instance, if the policyholder is diagnosed with first-stage cancer, the premium increase may be lower than if the buyer was diagnosed with second-stage cancer. Kidney ailments, very high or very low blood pressure, diabetes, obesity, and so on, are some common ailments that can lead to a high premium on your life insurance policy.

Some points to keep in mind when purchasing life insurance with pre-existing conditions:

Use a life insurance premium calculator to help you get an estimate of how much you will be charged as a premium. This calculator provides an estimate of the premium after you have entered variables such as your age, gender, whether you are a smoker, and so on.

Along with using a life insurance premium calculator, consider opting for a rider such as a critical illness benefit rider which covers the life assured against the diagnosis and consequence of critical illnesses to increase your coverage.

If the high premium seems like an obstacle to you, remember that life insurance premiums are eligible for tax deductions up to a maximum of Rs. 1.5 lakhs.

In conclusion, yes, one can apply for a life insurance policy with pre-existing medical conditions. One just needs to keep in mind that the premium may be higher; however, this should not mean that one skips on life insurance completely.