Securing affordable life insurance is a growing problem as more Canadians are diagnosed with serious ailments. Half of Canadians will develop cancer at some point in their lives, the Canadian Cancer Society says. The Heart & Stroke foundation points to an increase in the number of people with heart conditions and strokes. And about 8 per cent of Canadians have been diagnosed with diabetes, a condition that’s growing in frequency amid an aging population.
The number of Canadians with diabetes has doubled since 2000. As well as diabetes, people with severe mental illness, HIV, heart conditions and other serious ailments can be left in the lurch. Other red flags for insurers can include travel to certain parts of the world or risky recreational activities.
There’s also a trend of people needing insurance for a longer period because they have families later in life or haven’t paid off their mortgage yet.
The issue of pre-existing conditions is a bit of a growing issue because people are needing term insurance longer in their life because of the financial pressures today. Canadian are working later, they’re carrying debt longer, mortgage longer so they feel like they need term insurance to cover off that risk. And so it becomes harder when you’re 60 to 70, because people then have health issues.
Some insurer offer simplified coverage but it comes at a price. Premiums can be 50 per cent to 300 per cent higher than traditional term policies and coverage limits are lower.
Insurance companies have become much more liberal about covering people with health issues.
Years ago, if you had diabetes … you were declined for insurance, but now most, almost all, diabetics can get some form of life insurance. The situation changed because insurance companies have more data to evaluate life expectancy while medications and treatments have also improved.
No Medical Exam Life Insurance offers two forms of term insurance – Guaranteed Issue for people facing, for example, a serious cancer diagnosis; and Simplified Issue, a less expensive policy used for people with more manageable and less severe conditions.
With new and better treatments come changes from insurers. Canada Protection Plan has followed Manulife and Sun Life, which in 2016 began to offer insurance to some HIV-positive clients.
Traditional carriers require these patients have five years of stability on anti-retroviral therapy, an undetectable viral load and receive treatment by an HIV expert. Manulife precludes those with hepatitis, a history of intravenous drug use or other substance abuse, history of coronary artery disease, diabetes, cancer and AIDS-defining illness.
Canada Protection Plan doesn’t have these restrictions and offers $50,000 of coverage. That’s much less than the million-dollar limit by Sun Life and up to $2-million for Manulife applicants of ages 30 to 65.
Still, not everyone benefits from the insurers’ more open approach. Intravenous drug users, for example are denied coverage, which can be a problem for some people living with HIV.
Insurance companies are encouraged to shorten the five-year treatment requirement to two years since medical advancements have improved life expectancy.
The history of the illness and the public stigma toward those living with HIV has ensured that very few people even contemplate seeking insurance coverage. In the early days of the illness, there was no chance of even considering insurance. But there was a frustrating period after that when people were living longer and having healthier lives and were still being denied insurance as well and it made no sense.
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