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Can I Purchase Income Protection if I Have a Pre-Existing Condition?

Are you one of the millions of working-age Americans with a pre-existing condition? You may be wondering whether you can still purchase income protection. Although your medical history may impact your application, with the right strategies, you can generally secure the disability insurance you need to protect your paycheck and your financial future.

Up to Half of All Americans Have Pre-Existing Conditions

Few people are lucky enough to have a perfect medical history. Pre-existing conditions can include things like diabetes and asthma as well as heart disease and cancer. According to CMS, between 50 million and 129 million non-elderly Americans have a pre-existing condition – that’s 19% to 50% of all Americans under the age of 65.

If you have a pre-existing condition, you’re not alone. Plus, many of the millions of people in your situation have already recognized the need for disability insurance.

The Medical Underwriting Process

Individual disability insurance replaces a portion of the policyholder’s regular income during an eligible period of disability. Some people have a higher risk of experiencing a disability and, as a result, may need to pay higher premiums or receive more limited coverage. This is similar to what happens with other insurance products. For example, when you buy car insurance, the insurer uses your driving history (along with other factors) to determine rates.

The individual disability insurance application process typically involves medical underwriting. This may involve the following:

  • Medical questions
  • Medical records
  • A medical exam

Your job duties and hobbies can also impact your application. High-risk activities may result in higher rates or more limited coverage. For example, if you enjoy skydiving on the weekends, insurance underwriters will take this into account.

Different insurance companies give the same factor different weight. For example, if you’ve had cancer in the past, one disability insurance company might reject your application or offer unacceptable terms, but another might give you a reasonable offer. Don’t assume your medical history will prevent you from securing coverage.

Disability Insurance Without Medical Underwriting

Although individual disability insurance typically involves medical underwriting, there are some paycheck protection options that allow you to skip this process.

  • Simplified issue disability insurance uses a streamlined underwriting process that does not involve a medical exam. Although it can be a good option for people with pre-existing conditions, the coverage may be less comprehensive compared to individual disability insurance that involves medical underwriting.
  • Guaranteed standard issue disability insurance is an option for groups of five or more employees. Individuals enjoy streamlined underwriting and multi-life discounts.
  • Group disability insurance is offered by employers. Some employers offer both long- and short-term disability insurance options. The policies cover an entire group of employees at once, allowing individuals to skip underwriting and enjoy discounted rates. However, the coverage may be less comprehensive and flexible than what you receive under individual disability insurance. Plus, it’s tied to your job.

Exclusions for Pre-Existing Conditions

If you have a pre-existing condition, insurers may offer you good coverage at a reasonable rate but exclude your pre-existing condition from the coverage. This means you won’t be able to claim disability benefits if your pre-existing condition prevents you from working.

For example, if you’ve had breast cancer, your disability insurance policy may exclude disabilities caused by breast cancer. Similarly, if you apply for coverage when you’re already pregnant, your policy may exclude claims related to your pregnancy. Nonetheless, coverage may still be worthwhile. After all, you never know what may happen in the future – a different condition could force you out of work.

How to Secure Disability Insurance with a Pre-Existing Condition

If you have a pre-existing condition, these tips can help you secure coverage.

  • Work with an insurance agent. An agent can help you complete your application thoroughly and target insurance companies that are most likely to give you good terms.
  • Be upfront about your medical history. The insurer will likely discover the truth during the medical underwriting process. Plus, this information will help your agent target the right insurance companies for your situation. If you try to hide your medical information, the insurance company could deny a claim or retroactively void your coverage.
  • Consider all your options. Depending on your situation, simplified issue disability insurance may be your best choice. Your agent can help you consider your options.

Do you need help buying disability insurance with a pre-existing condition? Find an agent.