Life insurance policies pay out a lump sum if you die during the policy term. This means that when insurers are considering your application, they’re weighing up how likely it is that you will die during that time. In other words: how likely it is that they'd need to pay out.
Having a pre-existing medical condition like asthma will definitely cause insurers to consider this likelihood carefully during the ‘underwriting’ process that all applications go through. In simple cases, a decision about your application can be reached automatically, after asking a set of health and lifestyle questions. In more complex cases – e.g. for someone with an existing condition like asthma, depending on the severity – it’s likely be handed over to a (human) underwriter for review.
Depending on how severe your asthma is, you might find it more difficult or more expensive to get insured. This is because insurers may consider you higher risk to insure (so they’ll charge more to carry that risk) or too high risk (so they won’t be willing to insure you at all).
Can I buy life insurance if I’ve got asthma?
You should be able to buy life insurance if you’ve got asthma, unless your condition is particularly severe. Anyone who applies for life insurance has to answer questions about their health and lifestyle, which includes questions about their:
- Personal health history
- Family health history
- Height and weight (BMI)
- Smoking status
All of this will be taken into account during the underwriting process, as the insurer evaluates how much of a ‘risk’ you are to insure and how much you should pay to be covered. Getting help from an adviser can really help if you’ve got an existing health condition, as they’ll quickly be able to filter out the insurers most likely to accept your application, who offer the best terms for you and your circumstances.
What will insurers ask about my asthma?
If you’ve got asthma, it’s likely you’ll be required to provide the following info during the underwriting process:
- How frequently you experience symptoms
- How frequently you need to use an inhaler
- What treatment you're prescribed, including inhalers and steroids
- Details of any hospital admissions in the last 5 years
- Details of any time off work needed in the last year due to asthma
- Details of how asthma affects your daily life
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How will my asthma affect my life insurance application?
Typically, there are a few possible outcomes when you apply for life insurance but disclose a pre-existing health condition like asthma. These include:
- Your application being accepted as normal, with standard pricing rates – i.e. the same as they’d be for someone without asthma (this usually only happens if your asthma is mild)
- Your application being accepted but with a ‘loading’ on the price – i.e. your rates will be higher than they would be for someone without asthma (this usually happens if your asthma is moderate)
- Your application being declined – (this tends to happen if your asthma is severe and the insurer deems you too high risk to insure)
Buying life insurance if you have asthma: key facts
- Insurers will add a higher loading to the price if you have asthma but you also smoke; and the more cigarettes you smoke per day, the higher the loading will be
- Insurers generally categorise asthmatics into three categories: mild, moderate and high; the category you’re in will determine how eligible you are for cover and how much it'll cost you to get insured
- Having asthma will affect the price in a similar way when you’re buying life insurance as when you’re buying other products like income protection and critical illness cover
How asthma categorisation works
You’re likely to be categorised as mild if:
- You have asthma symptoms less than once a week
- You haven’t visited hospital for asthma in the last 5 years
- You haven’t needed time off due to asthma in the last year
- You don’t need oral steroids to manage your asthma
Being categorised as mild usually means you won’t have a loading added to the price of your policy (unless you smoke). In other words, you’d pay the same as someone of a similar profile who doesn’t have asthma.
You’ll be categorised as moderate if:
- You experience 1-2 asthma symptoms a week
- You’ve visited hospital for asthma no more than twice in the last year
- You’ve needed some time off due to asthma in the last year
Being categorised as mild usually means you’ll have a loading of 75% added to the price of your policy. In other words, you’d pay 75% more than someone of a similar profile who doesn’t have asthma. The loading is likely to be higher if you also smoke.
You’ll be categorised as high if:
- You experience asthma symptoms daily (or close to daily)
- You’ve been hospitalised for asthma more than twice in the last year
- You’ve needed time off due to asthma in the last year
- You use more than an inhaler to manage your asthma
Being categorised as high usually means the insurer will need further medical information from you before making a decision about your application. If they decide to insure you, a loading will be added to the price – making it more expensive than it would be someone of your profile without asthma. There’s also a chance the insurer will decline your application altogether.
Why it’s important to disclose your asthma
When applying for life insurance, it’s extremely important to answer all the health questions honestly. If you don’t disclose that you’ve got asthma when you have, regardless of whether it’s mild, you risk invalidating your policy and it not paying out in the future (this is the most common reason for claims not being paid out by insurers).
- You can apply for life insurance even if you have an existing health condition like asthma
- If you have asthma, you must disclose it during the application process, even if it’s mild, otherwise you risk invalidating your policy in the future
- If you disclose your asthma while applying for life insurance, extra medical information may be required from you during the underwriting process if your asthma is severe
- Depending on how mild or severe your asthma is, insurers may accept your application as normal; accept it but charge a higher premium; or decline your application
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This post is intended for informative purposes only and does not constitute advice.