FUDiabetes

Life insurance

For the adults with diabetes— what have been your experiences applying for private individual life insurance policies (outside of the group plans your employers might provide)

I’ve raised this question on other diabetes forums and was really surprised on the lack of collective experience on this topic.

Most Americans who have young children are grossly under insured and a lot of the life insurance they do have is sponsored by their employer-- which is highly problematic because it is more than likely that an employee loses their job (and the insurance that goes with it) before dying.

Current recommendations are that primary earners in households with young children should carry as much as 14 times their annual gross income in life insurance (I’d personally suggest that bulk of this coverage should be carried outside of their employment arrangement).

So what are our collective experience with private life insurance and diabetes?

I have not personally applied for any private individual life insurance policies since my dx.

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My employment is the only life insurance I have for my children and I have it set at the max (which isn’t much per child tbh). I have private life insurance for my wife outside of my employment because it was cheaper, for more coverage. And I’m covered for a lot under my employer.

My wife had an easy time getting coverage…nurse came to the house, did some checks…after processing and paperwork it was done.

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Thanks for the reply… your wife’s experience mirrors my own from before I had diabetes… of course the concern is though how much more difficult/ costly will it be to get a good private policy having a diagnosis of diabetes

Private life insurance costs a bunch when you are a diabetic. Even with records of good control and good A1C’s and all of that. When I told the guy I was a diabetic, he looked at me, put the actuarial table back into his briefcase, and took out the table that said I was gonna die soon and I would have to pay a butt load.

I had do get it through work because the private cost so much.

So the best I can do for my family is to not die.

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How old were you at the time? I’d imagine their tables weigh heavily the age of the applicant and the term of insurance for diabetics…

I’m sure it’s a lot more expensive, that makes sense… but workplace policies are much cheaper for a reason, because most people (even if they die) are never able to collect on their policy unless they literally keel over dead at the jobsite…

And from what I’m reading the rate classes of people with “diabetes” can vary widely depending on a number of factors after you apply … so I’m thinking the initial estimate might not always be a great representation for a diabetic

Life insurance has always been a sore spot for me. I only have been able to get a ten year term policy once and it was very expensive. I needed it for a business loan I had taken out and it was just a cost of doing business.

But I have one good life insurance experience. When I was in my twenties I looked into Dental Association life insurance, and they sent out an examiner. He found an abnormal nodule in my neck and referred me to my doctor. The doc did a needle biopsy of my thyroid and it came back papillary carcinoma. Surgery was immediately scheduled and my thyroid was removed. After surgery the surgeon told me that my doctor had great aim, because he found the only live cell in my whole thyroid. The gland had been totally destroyed by Hashimoto’s.

Sometimes getting a disappointment can be the best thing to happen to you. I didn’t get the policy, but I got the treatment I needed before it became an emergency.

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Update——

I applied for a 1M 30 year policy recently at age 37 with a very large well known well established insurance agency that I do all my other insurance through. The quick-quote thing on the website estimated about 160/ month.

Went through the application process and physical, was pretty nervous about the whole thing. They called yesterday and said I’d been approved for the policy but my rate class had to be adjusted due to “history of diabeetus.” They explained that they have 26 different rate groups for various risk assessments and I landed in the 5th from the best So the new price for a 30 year 1 million dollar escalated rather quickly to $314/mo. That seems like a lot but I guess it’s basically comparable to a reasonable car payment—- and a family’s financial security is far more important than that. They also outlined a lot of other options for shorter terms and/or lesser amounts that would reduce the cost if interested.

Long and short of it is that with well controlled type 1 insulin dependent diabetes I was able to secure a substantial term life insurance policy that covers my family all the way into “retirement age” but at an increased price

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That is really great news Sam! The cost seem a bit high, but if your situation needs life insurance, and many do, it is much better than doing without. Since I was assuming you couldn’t get the insurance except what is offered through work plans, I am a little bit happier about my sons prospects for getting life insurance.

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Yeah there was some sticker shock involved but the price does come down (as makes sense) rather quickly with 25y and 20y policies. In our particular situation I’m leaning more towards going all out toward the longest term and most benefit. Mostly because I learned with my previous LI experience that what seems like a long time or a lot of money right now likely won’t feel like either in the future.

I think this is a heavily under appreciated subject… I’ve had several rude awakenings with people dying prematurely… which is terrible enough… but a demise while a whole family depends on you without insurance is just not an acceptable possibility…

I’d strongly encourage everyone who considers my opinion worth a pinch of ■■■■ to ensure that their family is properly insured… you’ll sleep better at night even if it costs a significant amount of the discretionary spending that’s used on less important things

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I was never able to get term life insurance in the UK, it was just not an option for diabetics. While I was working in the US it came as one of the perks, so I had it. Now I’ve never really considered doing it because I’m not providing an income stream through work so what’s to insure?

I’m not sure it makes any sense for anyone; accidental death/disability insurance is surely far more appropriate? If you are providing an income stream for dependents by working and you become ill for an extended period then the problems your dependents face will be even worse than if you die simply because of the medical costs.

I strongly disagree. This type of insurance (at least in the USA) is provided by an employer. If you become sick and eventually die; that process is very very likely to take far longer than whatever courtesy window your employer extends to you for your benefits.

Most financial planners suggest not considering whatsoever employer based benefits when it comes to insuring ones family. For very good reasons…

I’m talking about AD&D insurance you obtain yourself, not through an employer. As the AIG website points out, you don’t need a medical exam and “This is ideal for people who may have had a hard time getting approved for a term or whole life insurance policy in the past, both of which may require a medical exam for approval.” Not that I’m recommending AIG.

AD&D does not cover that at all. Neither does term life insurance for the reason I stated; someone who faces this will run out of money, regardless of diabetes, because it will be necessary to swap to an individual health plan under the ACA (the coordination of benefits plans are way more expensive) and that will have a cost which is at least $12,000 per year (including the OOPMax) until you reach poverty level when you can swap to Medicaid.

This is in addition to the term renewal problem (described in the link above) with a term life insurance policy.

There really is no way round this math in the US. In the UK it’s a little different because the medical costs are pretty much zero and there is some measure of income support. However in either country and, so far as I know most countries in the world, the period while you are ill will result in a substantial reduction in family income until either you become better and get back to lucrative work or you die and your life insurance kicks in.

Now I believe there is insurance to cover illness, i.e. to cover loss of income due to illness, and sometimes that is part of the term life insurance policy that is associated with life assurance policies (“whole life insurance” in the US, though it’s not really insurance). However, you have to be healthy when it starts and you have to pay both the insurance and the savings premiums until you reach retirement age. Not for us and, in my opinion, not a good financial vehicle for retirement planning, though I know they are heavily sold because they make so much money for the banks.

Oh I see what you’re describing. ADMD policies which required no medical history etc were something I looked into but could not find ones (understandably) anywhere near the level of coverage I was looking for… I wasn’t even able to qualify for my wife’s new job’s group plan for amounts in excess of 250k…

Anyway, the no exam type of coverage sounded great but just wasn’t obtainable for me at the levels I needed and the cost per coverage turned out to be far higher…

Re running out of money to pay for the policy— there are additional riders that can cover the cost of the policy in event of inability to pay due to illness that add to cost—- but I can’t imagine any eventuality in which in my failing health my family couldn’t scrounge together the resources to pay as needed

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I recently got term life insurance. My goal was to provide the same amount of money per year to my kids that I currently make as an alive person in the case that I stop being an alive person.

My youngest will be out of college in 20 years so I got a 20 year term life policy. Because it’s for salary replacement, they only need 19/20ths of the total amount next year, and 18/20ths the year after that etc.

Nobody sells date-targeted term life as far as I know (but they should!), so I ended up getting a 10 year policy and a 20 year policy that run concurrently but are smaller, but that still when added together provide the same salary replacement at any given year. It was somewhat cheaper that way.

Also, I went through a life insurance broker who knew which insurers would be good for diabetes and which would be good for the medical issues my wife has. (Mine costs considerably more than hers.)

I should get disability insurance though, in case of some accident or maybe some diabetes complication. I’m sure that will be just as fun an experience as getting the life insurance.

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I was thinking about what I would do if I were 20-something again and expecting my first child. I came to much the same conclusion, except I think I’d try to calculate the real costs for a single parent raising the children then inflation adjust them to age 18.

The effect of inflation partially offsets the decreased time; after one year the amount with inflation is 19/20x1.03, which ends up being about 2% less rather than 5%.

I had long term disability from my employer when I was employed, but “long term” just meant a few years and the coverage was not 100% of income and it would have been taxable. Payments from a policy paid for by an individual are not taxable and, apparently, policies have flexibility in how long they run. Unfortunately the medical requirements are still there for individuals.

If you own a house and pay a mortgage there are specific policies that cover the mortgage payments if you lose your job. Since mortgage payments normally take a large part of any new home buyer’s income and since “job loss” is not made much more likely by diabetes those policies are probably worth looking at.

Buying a home is still the single best investment decision I made in my 20’s and it really helps in this situation because the tax-free lump sum payment from a term life policy can be used to instantly eliminate the mortgage payments from the equation, which will typically reduce the cost of living of the surviving spouse by 30%.

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Also at least with my current policies ADD policies only pay out in event of accidental death… not death due to natural causes… so that’s a rather large deal breaker

Long term disability offered by employers is usually very weak… eg mine pays out 50% of salary only if I become totally and permanently disabled such that you could not perform “any gainful employment whatsoever”

Not just disabled from current job… but any job whatsoever… And to qualify for that it’s a series of never ending bs, and virtually self defeating because of course the policy disappears and can’t be activated after you’re no longer an employee

Quality disability plans are available on private market but are very expensive

I priced out a good private market plan that would have been about $200/mo that would cover 70% of income for 5 years— and that was with a diabetes exclusion that no disability caused by diabetes would qualify

There are also policies that will pay off a second mortgage (at least, I’m not sure about a first) in case of death. They’re like a life insurance policy for the mortgage.

My high school boyfriend’s dad died unexpectedly, and the creditors were calling; I answered the phone one day. I flippantly told them “he can’t come to the phone, he’s dead.” Turns out, that flip comment was a good thing. He had the policy that paid off the second mortgage in full.

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Excellent advice. Indeed it seems like it is financially prudent to lock in a rate before you turn 30, but if someone had talked to me about financially prudent before my 30th birthday I think I might have asked for her phone number. That’s why I’m forming the opinion that the moment of “first child” is the point where it is really important to think about this stuff in the US.

I agree that @Sam’s rate seems reasonable; from memory it maps out to about $113,000 payment for 30 years of coverage (at $1M). It’s particularly good that it is available; in the UK when I was in my 20s it was a major undertaking to get auto insurance; there were very few companies that were prepared to cover diabetics and they only did so at a premium (=big profit: UK insurance companies weren’t regulated anyway like they are in the US, at least when I was familiar with their dismal practices.) I certainly didn’t progress from auto insurance (which the law required) and fire insurance (which the bank required) to anything non-required. In my defense I didn’t have children.

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