Samantha Markovitz, NBC-HWC
As a person with type 1 diabetes (T1D), discussing life insurance can be an empowering conversation when you are well-informed. While carrying glucose with you is something you can do to prepare for what may happen as you go about your day; carrying a life insurance policy is something you can do to prepare for what may happen as you go about your life.
If you are interested in solidifying your family's long-term financial stability, it's important to familiarize yourself with the life insurance application process. You can then choose a financial strategy that is best for you and your family.
It's entirely possible to overcome the discomfort around the topic of life insurance for type 1 diabetes — and make coverage decisions with confidence. Here are some insightful answers to the most common questions surrounding this topic.
How does life insurance work?
According to USA.gov, policyholders pay a premium to their life insurance company in exchange for a lump sum amount to be paid out to a designated beneficiary (usually a spouse) in the event of their death. The money from a life insurance policy can be used to help pay for funeral costs and support the surviving family members' living expenses, including paying the mortgage on a family home or college costs for children.
It's important to note that life insurance does not help pay for standard diabetes supplies or devices but may help with long-term care costs in the case of complete disability, depending on the terms of your policy.
There are a few different types of life insurance, which can be divided into two categories: term or permanent. Term life insurance usually has a lower premium and lasts for a period of time (usually 10, 20 or 30 years) before expiring. Permanent life insurance — which covers whole, universal and variable types — provides lifetime coverage (as long as premiums are paid) and builds cash value over time.
Who should you talk to about life insurance?
In order to determine the best life insurance policy for your family's needs, you can consult with two types of professionals:
- Financial planner. These professionals can help you assess your needs in the context of your overall financial strategy and long-term goals to determine the type of policy that is best for you. A certified financial planner (CFP) is someone who has met rigorous education and competency requirements and has committed to putting their clients' best interests ahead of any potential earnings or commission. Some financial planners sell life insurance within their business. If their product is a fit for you, this could eliminate the need for a separate insurance agent.
- Insurance agent. Experienced agents routinely assist people living with T1D and other chronic illnesses. They can help you find a policy, answer questions about the application process and inform you about any life insurance riders that would be wise to consider. An independent agent who works with a variety of insurance companies is more likely to match you with options that serve the unique needs of someone living with T1D. While your insurance agent can offer perspective on how life insurance could potentially enhance your financial plans, they don't typically offer detailed advice regarding how life insurance will play into your overall financial situation based on your current needs and long-term goals.
The CFP Board and The National Association of Personal Financial Advisors offer online search tools that can help you find a financial planner in your area. You may also ask your accountant, attorney or trusted family members and friends if they recommend any financial planners or independent insurance agents.
How can a person with T1D get coverage?
It's a common fear that people living with T1D will be flat-out denied life insurance — or if they are approved, that the premiums will be unreasonably high. While it is possible, there is also the possibility that the individual will be approved at a reasonable rate. The application process may vary, but you can expect to complete a basic application, undergo a medical exam and disclose medical records for review by the underwriter.
The medical exam and record review will look for how well-managed your diabetes has been by clinical standards, whether you have attended regular healthcare visits and any complications that have occurred as a result of T1D. Your age at diagnosis, hemoglobin A1C and non-diabetes health factors will also play a role. Taking the best possible care of your health and well-being is the most important thing you can do to give yourself an advantage in the application process.
Your approval may be subject to a lower health class rating, which means that if you are approved, you may pay higher premiums or be limited in the amount of coverage you can receive. Keep in mind that being denied by one life insurance policy does not mean that you will be denied by all companies and policies!
Is it possible to get life insurance without health status as a factor?
You may be able to get coverage without medical underwriting through your employer. This is sometimes called "basic life" or "income protection." Be aware that these supplemental policies come at minimal or no cost to you, but this type of coverage is not likely to provide a substantial payout. Consider it more of a "cherry on top" rather than the whole sundae.
Another option to be aware of is guaranteed issue life insurance. These policies do not require medical underwriting or a medical examination to qualify but typically have higher premiums and lower payouts.
Unlike the hot topic of health insurance, life insurance for type 1 diabetes often gets left out of the conversation. You should feel empowered to talk to your family about your long-term future so you can plan accordingly. Establishing coverage for financial security in your absence means you can live confidently knowing you have taken care of your family for years to come.
For more information on living with diabetes, explore Edgepark's website and discover answers to commonly asked questions.