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Ask an Underwriter: Diabetes by Natasha Cornelius | Nov 10, 2015 | InsuranceLife | 0 comments
Diabetes is a serious medical condition and can impact purchasing life insurance. While finding coverage may be more difficult for a diabetic than someone who does not have a health condition, there are life insurance companies who will offer coverage. We understand the importance of protecting your family from a financial struggle in the event of premature death and will work with you to get affordable life insurance coverage. Life insurance carriers all follow a different set of underwriting guidelines. This means that each carrier will rate a certain condition differently. While one company may decide to give an applicant a Preferred Plus rating for a certain condition, another company may offer only Standard. This is where we can help you. We have relationships with many of the best life insurance carriers and know the idiosyncrasies of each. Once we know your unique situation, we will shop your case at the appropriate carriers to help you get the best possible coverage.
We have relationships with many of the best life insurance carriers and know the idiosyncrasies of each. Once we know your unique situation, we will shop your case at the appropriate carriers to help you get the best possible coverage.
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What is Diabetes? Diabetes Mellitus (DM) is a health condition characterized by hyperglycemia (high blood sugar) in which there is an inadequate amount of insulin for the needs of the body (Type 1) or the insulin that is produced is ineffective (Type 2). The Centers for Disease Control estimates that in the U.S. diabetes affects 18.2 million people (or 6.3 percent of the population). Of this group, nearly a 1/3 are undiagnosed. Insurance medical testing discovers some of them.
Types of Diabetes Type 1 Diabetes Type 1 diabetes, formerly called juvenile-onset or insulin dependent (IDDM), has a peak age at onset of 12 years old. It is unusual to begin after age 40. Type 1 DM is due to beta cell destruction so that no insulin is produced and must be replaced by insulin injections. Symptoms include excessive thirst, excessive urination, and weight loss. Life insurance ratings for diabetes mellitus depends on 1) age at onset, 2) years since diagnosis, 3) control of the diabetes, and 4) presence of complications. Type 2 Diabetes Type 2 diabetes, was formerly called adult-onset or noninsulin dependent (NIDDM). It is characterized by 1) variable degrees of resistance to the action of insulin, 2) impaired insulin secretion by the beta cells, or 3) impaired glucose production. Type 2 DM usually develops over the age of 30, but its incidence is increasing in children and adolescents especially those who are obese. (80% of Type 2 patients are obese. Many have excessive thirst or urination, but most have no symptoms. Type 2 may also require insulin in the later stages). Type 2 is initially treated with diet and exercise. If decreased calorie intake and increased exercise does not result in blood glucose control, oral medication is added. Risk factors for the development of NIDDM are older age, obesity, positive family history, and history of gestational diabetes. Gestational Diabetes Gestational diabetes is diagnosed when glucose intolerance is discovered during a pregnancy. It is associated with increased perinatal complications. Risk factors for the development of gestational diabetes are older age, overweight, previous large or stillborn babies, or positive family history of diabetes. Women with a history of gestational diabetes have an increased risk of developing Type 2 diabetes (as high as 50% within 10 years and 70% within 20 years).
Underwriting Diabetes Underwriting diabetes is a complex process. The underwriters assign credits and debits to each applicant to determine the overall risk classification. It begins with assessing basic debits for diabetes for age of onset and the type of diabetes. Then additional credits or debits are assigned for: blood sugar control coronary artery disease (CAD) risk factors such as LDL (bad) cholesterol C-reactive protein (CRP) HDL (good) cholesterol weight blood pressure microalbumin (a microalbumin test is used to detect early signs of kidney damage.) Diabetes ratings increase with younger ages, longer times since onset, poor control, and complications. These would merit debits added onto the basic rating. Meanwhile, credits would be added if the condition is well-managed. After the underwriters review the complete application and all the records that go along with it, they then decide how much coverage and at what cost to offer the applicant, unless they decide to deny or post-pone the application. Most applicants that live with diabetes will end up being “table rated.” The table rating system typically means that your pricing for life insurance will be the Standard price plus 25% for every step down the table you are, Tables A-J or 1-10 depending on which format the insurance company uses. Example: As you can see from the chart below, if one company rates you as a Table 5 and another company rates you as a Table E, you would be equal in the eyes of the two insurance companies. One just chooses to use numbers and the other uses letters. Table Rating (alphabetical)
Table Rating (numerical)
Pricing
A
1
Standard + 25%
B
2
Standard + 50%
C
3
Standard + 75%
D
4
Standard + 100%
E
5
Standard + 125%
F
6
Standard + 150%
G
7
Standard + 175%
H
8
Standard + 200%
I
9
Standard + 225%
J
10
Standard + 250%
Let’s take a look at some real-life examples (names have been changed.) Case Study # 1: Jane Doe is 30 years old, a non-smoker, and was diagnosed with Type 1 diabetes when she was 4 years old. She visits her doctor every 6 months and her diabetes is controlled by insulin 70 units per day. She monitors her own blood sugar and the most recent reading was 112. Her most recent HbA1c level (glycated hemoglobin) was 7.4. She has not experienced any chest pain or coronary artery disease, protein in urine, neuropathy, retinopathy, abnormal ECG, overweight, elevated lipids, kidney disease, black out spells, or hypertension. She does not have any other major health problems. She applies for a $500,000 20-year policy and tells her agent she would prefer a term policy, but will consider a permanent policy.
Insurance Company
Approve/Decline/ Postpone
Tentative Offer*
Estimated Cost
A
Approve Term Policy
Table H Non-Tobacco
$120/month
B
Approve Term Policy
Table 10 Non-Tobacco
$140/month
C
Approve Permanent Policy, Decline Term Policy
Table 8 Non-Tobacco
$415/month
D
Decline
N/A
N/A
Insurance Company A offers Jane Table H non-tobacco. This means that if the Standard premium cost is $40/month, Jane would instead have to pay $120/month (40 x 200%) + 40. Insurance Company B offers Jane Table 10 non-tobacco. This means that Jane would be paying $140/month (40 x 250%) + 40. Insurance Company C offers Jane Table 8 non-tobacco, but only for a permanent policy. They opt to decline offering a term policy. A permanent policy averages to be 3-5 times more expensive than a comparable term policy, so here Jane would be paying $415/month. Insurance Company D decides to decline Jane’s application altogether. They would prefer to not accept the risks. Case Study # 2: John Doe is a 54 year old male, a non-smoker, and was diagnosed with Type 2 diabetes when he was 49. He visits his doctor every 6 months and his diabetes is controlled by daily medication. He monitors his own blood sugar and the most recent reading was 116. His most recent HbA1c level was 6.2. Other issues are elevated lipids, but controlled by medication, and history of kidney stones. He applies for a $500,000 20-year term policy. Approve/Decline/ Postpone
Tentative Offer*
Estimated Cost
A
Approve
Standard to Standard Plus Non-Tobacco
$135 – 150/month
B
Approve
Standard Non-Tobacco
$150/month
C
Approve
Table 2
$225/month
D
Approve
Table C
$263/month
Insurance Company
Insurance Company A offers John Standard to Standard Plus (depending on full review of his medical records.) Taking John’s age into consideration, we can estimate his Standard to Standard Plus premiums to be in the range of $135 – $150 monthly. Insurance Company B offers John a possible standard non-tobacco rating, as long as there have been no kidney stone attacks within the past year and no other complications. Insurance Company C offers John Table 2. With $150 being his estimated Standard monthly cost, we calculate (150 x 50%) + 150 to equal an estimated $225 monthly premium payment. Insurance Company D offers John Table C. To calculate a monthly premium estimate we take (150 x 75%) + 150 to equal approximately $263. *We say “Tentative Offer” because during these underwriting studies, the life insurance carriers come back to us with an idea of what they can offer our client. The company takes an overview look at the client to give a tentative offer. They still need to do a full review of the application and all records before confirming any premium costs and rating classifications. A benefit to working with Quotacy is that we work with multiple A-rated life insurance companies. As you can see from these examples, shopping your application around to more than one insurance company can only help you. Quotacy has years of experience getting clients life insurance coverage, including diabetics. Our in-house underwriter has worked in many carrier home offices, knows how to navigate each individual’s health history, and knows which life insurance company would be the best option for your individual case. If you are ready to buy life insurance coverage, get a term life insurance quote now and let’s start the process. If you have any questions regarding underwriting diabetes, feel free to contact us or jot us a message in the Comment section below. If you are looking to get an idea on the cost of life insurance if you have diabetes, we will need the following information to provide you with an accurate quote. 1. Date of when you were first diagnosed. 2. Which type of diabetes you have: a. Type 1 b. Type 2 c. Gestational 3. How your diabetes is controlled: a. Diet alone b. Oral medication (medication & doses) c. Insulin (amount of units/day) 4. Are you on any other medications? 5. Your most recent blood sugar reading and whether you monitor it yourself. 6. Most recent glycohemoglobin (HbA1c) or fructosamine level, if available. 7. Also let us know if you have had any of the following: a. Chest pain or coronary artery disease b. Protein in the urine c. Neuropathy d. Retinopathy e. Abnormal ECG f. Overweight g. Elevated lipids h. Kidney disease i. Black out spells j. Hypertension Give us a 2-3 business days to respond with some individualized and thorough information. Quotacy is here to help make the life insurance buying process easier for you. Photo credit to: Frank Hull
Related Posts: What is a Risk Class and How Does it Affect Me? Will I Be Rated Preferred or Standard? How Does Diabetes Affect Life Insurance? Tweet
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About the writer Natasha Cornelius Marketing Content and Social Media Manager Natasha is a content manager and editor for Quotacy. She has worked in the life insurance industry since 2010, and making life insurance easier to understand with her writing since 2014. When not at work, you can find her throwing a tennis ball for her pit bull mix, Emmett, or curled up on her couch watching Netflix. If it’s football season, the Packers game will be on. Connect with her on LinkedIn.
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