Diabetes and life insurance: what you need to know
It's National Diabetes Week from July 14-20, 2024, and it's the perfect time to dive into an important topic: diabetes and life insurance. Whether you're living with diabetes or know someone who is, understanding how this condition impacts life insurance can be crucial for financial planning. Let's break it down in a way that's easy to digest (pun intended).
What is diabetes?
Diabetes is a chronic condition that affects how the body processes blood sugar (glucose). According to the Australian Institute of Health and Welfare (AIHW), over 1.2 million Australians are living with diabetes. This includes both Type 1 and Type 2 diabetes. Type 1 is often diagnosed in childhood and requires insulin injections, while Type 2 is more common in adults and often linked to lifestyle factors like diet and exercise.
Source: Zurich Insurance Group, Cost of Care Whitepaper
Diabetes and life insurance: The basics
1. Can I get life insurance if I have been diagnosed with diabetes?
Yes, you can get life insurance if you've been diagnosed with either Type 1 or Type 2 diabetes, provided your diabetes has been well managed for at least 6 to 12 months. However, if you have additional health conditions like coronary heart disease, smoking habits, obesity, or poorly managed high blood pressure, it might be more challenging to get approved.
Over 1.3 million people were newly diagnosed with type 2 diabetes in Australia between 2000 and 2021. This was an average of 60,000 people each year.
2. Does life insurance cost more for people living with diabetes?
Yes and sometimes. Even though diabetes is a serious medical condition, it doesn’t mean those with it can’t get a life insurance policy. Life insurance costs might be a bit steeper for people with diabetes because insurers see them as a higher risk. The premium you pay will depend on how the life insurance company assesses your health and treatment factors.
3. Medical underwriting
When you apply for life insurance, insurers will typically ask for detailed medical information. This process is known as underwriting. If you have diabetes, you'll likely need to provide additional information about your condition, including your blood sugar levels, medications, and overall health management.
If you have diabetes, underwriters will consider several factors to assess your application:
Type of diabetes: There are three main types of diabetes – type 1, type 2, and gestational (which occurs during pregnancy). Type 2 diabetes is the most common, accounting for 85% of all diabetes cases, as noted by Diabetes Australia.
Age at diagnosis: Being diagnosed with diabetes at a younger age can increase the likelihood of complications later in life. For instance, a 2018 study by the Baker Heart and Diabetes Institute found that Australians diagnosed with type 2 diabetes at an earlier age faced a higher risk of death from cardiovascular disease or stroke.
Blood glucose control: Insurers will typically request your most recent HbA1c test result to gauge how well your diabetes is managed. According to life insurer TAL, underwriters generally look for a reading of 7% or lower.
Treatment: Insurers will want to know about your treatment plan, such as whether you are on insulin injections or other medications.
Previous complications: If you've experienced issues like eye problems, kidney issues, or high blood pressure related to diabetes, this will be considered.
Height and weight: Being overweight can increase the risk associated with diabetes. Maintaining a healthy weight can positively impact your application.
Lifestyle factors: Smoking and heavy drinking can elevate your risk profile. Underwriters will inquire about these habits.
Family history: If your family members have been diagnosed with diabetes or other serious health conditions, and the age at which this occurred, will also be taken into account.
These factors help underwriters get a comprehensive picture of your health, allowing them to make informed decisions about your life insurance application.
4. Policy exclusions
Some life insurance policies might include specific exclusions related to diabetes. It's important to understand these details to ensure your coverage meets your needs.
Source: The State of the Nation 2024 | Diabetes Australia
Tips for getting life insurance with diabetes
Maintain good health
Keeping your diabetes under control can make a big difference. Regular exercise, a healthy diet, and consistent monitoring of your blood sugar levels can improve your overall health and potentially lead to better insurance rates.
Work with a financial adviser
A financial adviser can help you navigate the complexities of getting life insurance with diabetes. They can guide you towards the best policies and help you understand the fine print.
Managing diabetes is a lifelong journey, but it doesn't have to be a barrier to securing life insurance. By staying informed and proactive, you can find a policy that meets your needs and provides financial security for your loved ones. This National Diabetes Week, take the time to review your options and make sure you're covered.