News and Articles

I Have A Chronic Illness. Can I Get Life Insurance?

By | Insurance | No Comments

This content is for information purposes only and should not be taken as financial advice. To receive regulated, tailored financial advice into your own goals and circumstances, please consult an independent financial adviser (IFA) here in Grantham or in your local area.

If you have recently been diagnosed with a chronic or serious illness, first of all we at Castlegate want to offer our condolences. As financial advisers helping clients across Grantham and the wider Midlands, we often speak with people in such circumstances and witness the challenges these can bring to families.

One of the many questions our advisers are asked in these situations concerns life insurance: “Can I get insured, now that I have been diagnosed with a serious illness?” It’s a fair question to ask, and indeed many people with an illness/condition such as epilepsy, asthma or diabetes simply assume that life insurance is not a realistic option for them.

In this short guide, we’d like to encourage you that life insurance is not necessarily off the table for those with a chronic illness. Please do not assume that you will be automatically barred from providers. It’s important to consider exploring the options with an experienced financial adviser, who might be able to uncover opportunities which you might not have found on your own.

Life Insurance: A Quick Recap

It’s important to take a bit of a step back and recap how life insurance works, and the different types available. At its core, life insurance is designed to provide funds to your surviving loved ones after you die. This can be especially important if your family relies on your income to meet important expenses, such as rent or school payments.

The funds from a life insurance policy could be used to pay off the remaining mortgage on your home, for instance, or simply to provide a “savings safety net” for your spouse/partner and children for at least a few years as they find ways to replace your lost income.

Similar to car insurance and other types of insurance, you need to pay monthly premiums to your life insurance provider to help ensure you can one day access the policy benefits. How much you pay depends on things such as your age, level of cover, lifestyle factors and your past and existing state of health.

Life insurance is broadly divided into two types: term life insurance and whole-of-life insurance. The first type generally covers you for a fixed period, whilst the latter pays out when you die (regardless of when that occurs). The former tends to be cheaper than the latter, although your family will not receive the policy lump sum if you survive the term. The latter guarantees a payment to your loved ones, but typically comes with a higher price tag.

How it is Bought

Life insurance is sold by all kinds of businesses and organisations these days; not just insurance companies, banks or building societies. Policies are offered by various supermarket brands, for instance, as well as by other retail industries. Sometimes a company will even sell a policy with another brand’s name on it.

It’s easy to get lost in the life insurance market even with the myriad of price comparison websites available to help you. Indeed, it isn’t uncommon for people to pay more for a policy via one company, which would have been cheaper elsewhere – and for less cover. Our honest recommendation for most people is to consult an independent financial adviser, who can help you sift through the market and find the best options appropriate for your needs.

Life Insurance & Chronic Illness

Getting life insurance is, of course, typically easier and cheaper if you have not been diagnosed with a chronic illness; although it is not impossible. You should be aware that you are not guaranteed to be offered a life insurance policy if you have been diagnosed with cancer or another potentially life-threatening illness, but it is still possible. Especially with the help of an experienced adviser.

Your illness is likely not within your control, but other lifestyle factors which can affect your eligibility for life insurance often are. Even if you have been diagnosed with a form of cancer, for instance, many people can still choose to lead an active lifestyle free of smoking or alcohol.

Life Insurance After Beating a Chronic Illness

If you are in the fortunate position where you have survived and recovered from a diagnosis of cancer or another chronic illness, then this can affect your life insurance options and premiums. The availability and costs of various policies is likely to be affected by factors such as the type of cancer you had, for instance, how long you had it for as well as its severity.

Final Thoughts

This whole subject is obviously somewhat complex and can be quite emotional. There is also a lot of overlap between life insurance (which deals with sudden death) and critical illness cover, which pays out upon official diagnosis of a specific illness. Sometimes these two types of insurance are taken out together, although not necessarily with the same provider. The picture is also made complicated by each person’s circumstances. Perhaps you already have a life insurance policy, for instance, but the level of cover does not go far enough. Measures which mitigate inheritance tax and thereby maximise the value of your estate for your loved ones should be considered e.g. arranging policies under a suitable Trust.

Regardless of your needs or personal situation, our independent financial advisers in Grantham here at Castlegate are at hand to guide you. Not only can we help you find the best protection policies for your needs, but we can also ensure that these fit well within a wider, coherent financial plan which keeps you on course towards your financial goals.

If you are interested in finding out more, please get in touch today to arrange a free consultation with a member of our Castlegate team, at our expense. You can contact us via:

01476 591022