Life Insurance Health Class Rating For A Diabetic

Life Insurance Health Class Rating For A Diabetic

Life insurance is one of the most important safety nets that you can ever buy for your loved ones. It’s one of the only ways that you can ensure that your family has the money that they need if something tragic were to happen to you. When you’re applying for insurance coverage, the insurance company is going to look at your health to decide how much of a risk you are to insure. The more risk that you are, the more that you’re going to pay for coverage. If you’re an applicant with diabetes, you could face some unique challenges to get life insurance.

If you are a diabetic shopping for life insurance then sooner or later you will be faced with the question: What health class am I? Many life insurance applicants don’t fully understand what this rating class means and how it affects your life insurance rate, particularly if you have type 1 or type 2 diabetes.

When it comes to getting life insurance with diabetes, it is important to understand how insurance companies look at diabetic applicants. When an insurance underwriter gets your application, he or she will look at many factors to determine whether or not you are qualified for coverage.

The basics factors that are considered are:

  • The type of diabetes that you have – type 1 or type 2
  • The age you were diagnosed
  • Your level of control, which is checked by an a1c test
  • The type of medications you use – insulin, oral, or none
  • Overall health, including any diabetic complications

With these factors, an underwriter can then go to the next step and assign you to a certain risk class, or health rating. This is how the rate that you pay is determined.

Diabetes Life Insurance Health Ratings

The premium that you pay for a policy is determined by assigning you to a particular health rate class, which fall under three basic categories.

Preferred Plus / Preferred. If you are in excellent health with no major medical issues, no family history or health problems, and your height and weight are in a healthy range, then you would fall under the preferred rate class. If you are given a preferred health rating, then you will get the absolute lowest rate offered by a company.

Standard Plus / Standard – If you have some health issues or a family history of health concerns, then that would disqualify you for a preferred rate and you would fall under a standard health class. This is the most common health rating that applicants get. It means your health isn’t perfect, but it’s not bad either. You are in average health. The rates aren’t as low as a preferred rate, but not super expensive.

Substandard – Someone who receives a substandard rate class are considered high risk to an insurance underwriter. There are levels to this health rating and these levels are referred to as tables. Table ratings go from table 1 to table 10 and each level up adds on an additional cost to the premium.

To make it very simple – the better the health class you fall under, the better your rate. And lower rates means money saved. And money saved monthly means big money saved over the life of your policy.

How Diabetes Type Affects Your Health Rating

When it comes to the type of diabetes you have, people with type 2 will typically be able to qualify much easier and also receive more favorable rates. You can still get coverage with type 1 but only if you have good control of your diabetes and only with a few selected companies. One of the most important factors used for determining your diabetic life insurance rate class and eligibility are your current A1c levels.

How A1c Affects Your Health Rating

Your a1c level is the greatest tool that an underwriter has to get a snapshot of your blood sugar control. Because it measures your blood sugar levels for the previous three months, an underwriter can see how your long-term management is,

If you have A1c levels below 7.0 you can qualify for standard rates at best. However if they are between 7.1 to 8.0 expect to get substandard rating of table 2 to table 4. Anything above 8 will result in table 5 and up, or a decline if your diabetes are not under control.

Example Savings of Preferred vs. Standard Health Rating

Just to give you an idea of what the difference in price is if you get a standard health rating vs. sub-standard.

Let’s say you are a 50 year old non-smoking male shopping for a $500,000 20 year term policy and you have an a1c of 8.0 This would put you into a substandard rate class. Your premium may be around $4600 per year.

If you have an a1c of 6.5, the company offers you a standard rate of  $2270 per year.

That is a savings of $2,330 per year. After 20 years, you will have saved $46,600! That’s a huge savings! This example shows the difference between standard and substandard rates, so just imagine how much you can save if you have type 2 diabetes and get a preferred rate. This is possible with one company, as long as you meet certain strict requirements.

How Other Factors that Affect Your Rating

As I mentioned above, an underwriter is going to look at several things to get a picture of your health and risk to the company. Another thing that they evaluate is your height and weight. This is referred to as your “build” and if you are considered overweight, then an additional premium may be added onto your rate.

Your overall health is an important factor, which includes any complications. If you have health issues like high blood pressure, hypertension, or other factors then that can easily bump you down to a substandard risk class.

Using insulin vs. oral medications can also put you in a lower rate class, depending on the company you apply to.

No Medical Exam Plans for Diabetics

Another option for life insurance for applicants with diabetes is to buy a no medical exam plan. These plans are going to allow you to buy life insurance coverage without having to take a medical exam. These plans could be a great option for anyone that’s in poor health or has several pre-existing conditions coupled with the diabetes. There are several advantages and disadvantages that you should be aware of when looking to get insurance coverage.

The biggest advantage is that anyone can buy one of these plans, regardless of your health or pre-existing conditions. It’s vital that your family has the insurance protection that they need, and your health shouldn’t prevent you from getting that coverage.

Another advantage is that you can be approved for life insurance coverage much faster than you can with a traditional plan. With one of these plans, you can be approved for life insurance in a matter of days. With a normal plan that requires a medical exam, you could wait several weeks until you have life insurance protection. If you want to get life insurance as quickly as possible, a no medical exam is the best way to get it.

One of the disadvantages of these plans is that they are going to be more expensive than a plan that these plans are going to be more expensive than a normal plan. The purpose of the medical exam is to give the company an idea of how much of a risk you are to insure, the more risk that you are, the more they are going to charge you. Without the medical exam, the company is taking a much great risk. If you’re looking for the cheapest insurance premiums, you’ll need to apply for a traditional plan.

Another disadvantage of these no medical exam plans is that you may be limited on how much coverage that you can buy. Most insurance companies will only sell you around $250,000 with a no exam policy, which isn’t enough coverage for most families.

How to Move Forward

All insurance companies are in the business of making a profit, but that doesn’t mean you have to pay excessive diabetic life insurance rates. One of the easiest ways to ensure that you save money is by being strategic about which company you choose to apply to. There are dozens of insurance companies and each one of them has unique criteria that they use to evaluate your health class, rate, and more. Some companies charge more if you are a type 1 diabetic, even if your control is good. Other companies charge more if you take insulin, even if you have an excellent a1c.

So the key is picking that just right company for your situation whether you are type 1 or 2, taking insulin or not, with a good a1c or poor control.

The best way to do this is by working with an experienced and knowledgeable independent agent. Independent agents work with many companies, which means they are not trying to squeeze you into any particular box. They can shop your case around to different underwriters and they know which ones are best for your situation. This means a higher chance of getting approved as well as getting the lowest rate possible.

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