Income protection for people with diabetes

When you take out any kind of insurance, insurers calculate your level of risk so they can decide whether or not to insure you and how much it should cost. This is what’s known as the ‘underwriting’ process.

Income protection policies cover you in case you can’t work for any health reason. Since this is a health-related insurance product, insurers will need to know about your health history before agreeing to cover you. It’s important to be completely honest and accurate during this medical underwriting process to make sure you don’t invalidate your policy further down the line.

If you disclose that you have diabetes when you apply for income protection, you might find it more difficult or more expensive to get covered depending on what type of diabetes you have and what your HbA1c level is.

Can I buy income protection insurance if I have diabetes?

You might be able to buy income protection if you have diabetes, though the success of your application and how much it costs will vary from insurer to insurer based on the nature of your condition. Everyone who applies for income protection has to answer questions about their:

• Personal health history
• Family health history
• Height and weight (BMI)
• Smoking status

An insurer will take all of these factors into account when looking at your application. If you have diabetes, getting help from an adviser will really help. They’ll quickly be able to let you know whether you’re eligible for cover and, if so, filter out the insurers most likely to accept your application.

What will insurers need to know about my diabetes?

If you’ve got diabetes, it’s likely you’ll be required to provide the following information during the underwriting process:

• If you’ve been diagnosed with with type 1 or type 2 diabetes
• When your last diabetic review was
• What treatment you have
• Details of any hospital admissions (besides regular reviews)
• The result of your latest HbA1c test
• And any other complications – e.g. eye problems, kidney problems, abnormal urine test results, or any tingling or numbness in the fingers, toes or feet

How will my diabetes affect my income protection application?

Typically, there are two possible outcomes when you apply for income protection but disclose that you have diabetes. These are:

1. Your application being accepted with a ‘loading’ on the price. A loading means you’ll pay between 50% and 150% more to be covered. This outcome is likely if you have type 2 diabetes and an HbA1c level of 7% or below.
2. Your application being declined. This is likely to happen if you have type 1 diabetes or you have type 2 diabetes and an HbA1c level above 7%.

Why are some people too high risk for insurers?

It’s true that having diabetes could make you ineligible for products like life insurance and income protection insurance. The same is true of other health conditions. The reason insurers exclude some people on the basis of their health is so that they can offer a product that is fairly priced for the majority of people.

What’s the logic behind this? People with an existing or previous health condition (especially if severe) are more likely to claim on health-related insurance products, so insurers would need to charge more in average monthly premiums if they were to carry the risk of covering these people.

A higher rate of claims by people with severe health issues would drive the price up for everyone. This is deemed unfair by insurers, so they tend to decline covering people with severe health issues.

Why it’s important to disclose your diabetes diagnosis

When applying for income protection insurance, it’s extremely important to answer all the health questions honestly. If you don’t disclose that you have diabetes, you risk invalidating your policy and it not paying out in the future, when you need it to. The same applies to any other health condition you have.