Taking out life insurance can offer peace of mind that your family will be financially secure – whatever may happen. But can you get life insurance if you’ve suffered an illness or serious medical condition? This guide explains how life insurance with pre-existing conditions works in Canada, the available options, and how to secure the best rates.

What is a Pre-Existing Condition?

A pre-existing condition is a medical issue you were diagnosed with or treated for before applying for life insurance. Common pre-existing conditions that concern insurers include:

• Chronic diseases: Diabetes, Heart disease, Cancer, High blood pressure, High cholesterol
• Mental health disorders: Depression, Anxiety, Schizophrenia
• Neurological conditions: Epilepsy, Stroke, Alzheimer’s, Parkinson
• Respiratory issues: Asthma, COPD, Sleep apnea
• Other risk factors: Hepatitis B or C, Obesity and eating disorders, HIV/AIDS

When assessing an application, life insurance companies consider how a pre-existing condition impacts an individual’s risk of premature death. More severe or poorly controlled conditions translate to higher risk and increased premiums. Some pre-existing conditions, like well-managed asthma, may have little effect on insurance rates, while others, like recent cancer, can result in coverage being postponed or denied.

Can You Get Life Insurance with Pre-Existing Conditions in Canada?

It is still possible to obtain life insurance if you have a pre-existing condition, but approval depends on 3 main factors:

• Condition severity & management: Insurers assess the type of pre-existing condition, when it was diagnosed, treatment history, and how well it is currently controlled. Conditions that are mild or well-managed with medication, lifestyle changes, and regular physician oversight are more likely to be insured than severe or poorly controlled conditions.
• Insurance provider guidelines: Each insurer has its underwriting standards and approach to various pre-existing conditions. Some specialize in high-risk applicants, while others have strict approval criteria.
• Policy type: Fully underwritten policies, like term and permanent life insurance, typically require a medical exam and more rigorous health assessments. No-medical exam options, such as simplified issue and guaranteed issue policies, have more lenient underwriting and lower coverage amounts and premiums.

What is the Underwriting Process for Life Insurance with Pre-Existing Conditions?

To evaluate an applicant’s risk and insurability, life insurance companies conduct an underwriting process that typically involves:

• Health questionnaires & medical records: You will need to disclose your medical history, including specifics about any pre-existing conditions, such as diagnosis date, treatments, medications, and current status. Insurers will also review your physician’s records.
• Medical exam: Fully underwritten policies often require a paramedical exam with basic lab work to assess your current health.
• Risk classification: Based on the collected health information, insurers assign applicants to risk categories, such as:
  • Preferred Plus/Elite: Exceptional health, lowest rates
  • Preferred: Excellent health, lower-than-average rates
  • Standard Plus: Good health, slightly lower than standard rates
  • Standard: Average health, normal rates
  • Substandard (table-rated): Below-average health, higher rates
  • Declines: Deemed too high-risk to insure at this time

Factors life insurance providers consider

Key factors underwriters evaluate include the type and severity of the condition, age at onset, time since diagnosis, treatment effectiveness, follow-up care, and lifestyle habits like smoking.

• The severity of the condition: More serious or complex conditions, such as heart disease, cancer, or uncontrolled diabetes, will be viewed as higher risk than milder, more easily managed conditions like well-controlled hypertension or asthma. Underwriters assess the potential impact of the condition on mortality risk.
• Time since diagnosis: Recent diagnoses or changes in health status are viewed as more concerning, as the long-term prognosis may not yet be clear. Underwriters prefer to see a period of stability, often at least 6-12 months, before offering coverage.
• Treatment effectiveness: Underwriters look favourably upon conditions that respond well to treatment and are being actively managed by the applicant and their healthcare team. They will request records demonstrating that the condition is controlled with medication, lifestyle changes, or other interventions.
• Lifestyle habits: Smoking, excessive alcohol use, and other risky lifestyle behaviours compound the risk posed by a pre-existing condition.

What Type of Life Insurance Can You Get with a Pre-Existing Condition?

Depending on your specific condition and overall health, you may qualify for one or more of the following life insurance options in Canada:

Traditional Life Insurance

Traditional Life Insurance (Term Life and Permanent Life) is best for well-controlled conditions.

Term Life Insurance

Term life insurance provides coverage for a specified period, typically ranging from 10 to 30 years. It is the most affordable life insurance option for healthy individuals, as premiums are calculated based on the likelihood of the insured passing away during the term. However, term life insurance requires full underwriting, including a medical exam, to assess the applicant’s health and risk factors.

• Best for: Temporary coverage needs and budget-conscious applicants whose pre-existing conditions are mild or well-managed

Permanent Life Insurance

Permanent life insurance, such as whole life, universal life, and variable life, provides lifelong coverage and includes a savings component known as cash value. The cash value grows tax-deferred over time, allowing policyholders to accumulate wealth alongside their death benefit. Permanent policies are more expensive than term life insurance, but premiums remain level for the duration of the policy. Some permanent life insurance policies may have more flexible underwriting guidelines for certain pre-existing conditions.

• Best for: Lifelong coverage, estate planning, and those wishing to accumulate cash value in addition to a death benefit

No-Medical Exam Life Insurance

For those who are not qualified for Traditional Life Insurance, they can apply for No-Medical Exam Life Insurance

Simplified Issue Life Insurance

Simplified issue life insurance does not require a medical exam, but applicants must answer a series of health-related questions. The underwriting process is less rigorous than that of fully underwritten policies, making it easier for individuals with moderate pre-existing conditions to qualify. However, simplified issue policies typically have higher premiums compared to traditional life insurance policies.

• Best for: Those who may not qualify for traditional policies due to their health but are still in good overall condition.

Guaranteed Issue Life Insurance

Guaranteed-issue life insurance is available to applicants without needing a medical exam or health questionnaire. As long as the applicant is within the eligible age range (typically 40-85), they cannot be denied coverage. However, this type of policy is the most expensive life insurance option and has the lowest coverage limits, usually not exceeding $25,000. Guaranteed-issue policies often have graded death benefits, meaning that if the insured passes away within the first two or three years of the policy, the beneficiaries may receive only a portion of the death benefit or a return of premiums paid.

• Best for: Individuals over 50 with serious pre-existing conditions who have been declined for other policies and need some protection for final expenses.

How Much Does Life Insurance with Pre-Existing Conditions Cost?

Life insurance premiums for people with pre-existing conditions are based on 4 factors:

• Age: Rates increase with age, with sharp upticks after 50
• Condition severity: More recent diagnoses, progressive diseases, and complex health histories result in higher rates than milder, well-controlled conditions
• Insurer underwriting guidelines: Some insurers specialize in particular pre-existing conditions and may offer more competitive rates
• Policy type: Term life premiums are much lower than permanent policies, while no-exam options cost more than fully underwritten plans

Estimated Monthly Premiums by Risk Category

Insurance Type	Monthly Premium Range	Best For
Term Life	$30-$150	Healthy individuals with temporary needs
Whole Life	$200-$500	Lifelong coverage and cash value growth
Universal Life	$150-$600	Flexibility and investment options
Simplified Issue	$50-$300	No-exam coverage for minor conditions
Guaranteed Issue	$50-$500	High-risk applicants needing small policy

These are general ranges – your actual quotes will depend on your specific age, health, and desired coverage amount. Use an online life insurance calculator or consult with a licensed agent to estimate your personalized rates.

Tips for Lowering Life Insurance Costs If You Have a Pre-Existing Condition

If you have a Pre-Existing Condition, there are 6 tips to reduce the cost you need to remember:

• Apply with the Right Insurer: Underwriting guidelines vary by company. Some are more lenient about certain pre-existing conditions than others. Your agent can identify the most accommodating carrier for your situation.
• Demonstrate Condition Management: Insurers reward proactive health management. Provide records showing you’re following prescribed treatments, routinely seeing your doctor, and making positive lifestyle changes. The longer your condition has been well-controlled, the better.
• Reduce Risky Behaviors: Quitting smoking, moderating alcohol intake, exercising regularly, and maintaining a healthy weight improve your overall risk profile. Smoker vs. non-smoker rates are vastly different.
• Choose the Optimal Time to Apply: Don’t apply immediately after a new diagnosis, adverse health event, or change in treatment. Wait until your condition stabilizes. Some insurers may postpone acceptance for 3-6 months after starting a new medication or 1-5 years after cancer treatment, for example.
• Be Honest and Thorough: Disclose all requested health information fully and accurately. Withholding details or misrepresenting your condition is fraud. If discovered, it can lead to coverage being denied or claims being rejected.
• Work with an Agent or a Broker: They can compare policies from multiple insurers to find the best fit for your health profile and budget. Look for one who specializes in impaired risk cases.

What If Your Life Insurance Application is Rejected due to Pre-existing conditions?

If you are rejected for life insurance due to your pre-existing conditions, consider to take these five steps:

1. Review the Rejection Reason: Contact the insurance company to understand the specific reasons for the denial. This information can help you address any concerns when applying elsewhere or improving your health.
2. Reapply After Making Health Improvements: If you’re denied because your condition isn’t well-controlled, work with your doctor to make positive changes. Reapply 6-12 months after demonstrating improvements like lowering your blood pressure or cholesterol through diet, exercise, and medication adherence.
3. Try Guaranteed Issue: Though not ideal due to limited coverage and high costs, a guaranteed acceptance policy may be your only option if you have a severe pre-existing condition. These are typically available to older applicants ($50+) for small, whole-life policies to cover final expenses.
4. Explore Alternative Financial Vehicles: If life insurance isn’t obtainable, you can still plan for your family’s financial future through savings, investments, annuities, long-term care insurance, or critical illness insurance.
5. Work with a High-Risk Insurance Broker: Agents specializing in high-risk cases know which companies have the most favourable underwriting for specific conditions. They also have working relationships with insurance company underwriters and can advocate on your behalf for better rates or reconsideration after a denial.

The Bottom Line

Living with a pre-existing condition doesn’t automatically disqualify you from obtaining life insurance in Canada. You can still get covered, even if it means paying somewhat higher premiums or considering no-medical exam policies with more limited benefits. The key is to apply with the right insurer for your condition, be transparent about your health history, take steps to demonstrate good control of your condition and work with an experienced high-risk insurance broker or agent to explore all available options and secure the best rates.

FAQs

Article Sources

• What is a pre-existing condition? – policyadvisor.com
• Life insurance for pre-existing conditions -ratehub.ca