Life Insurance with Family History
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While most individuals who shop for life insurance are shocked by the number of questions I ask before I calculate the rates, the greatest confusion is when I ask, “Have any immediate family members (mother, father, brother, sister) been diagnosed with or died from coronary artery disease, cerebrovascular disease, diabetes, or cancer before age 60?” After five seconds of silence, I get this: “What does my family history have to do with my application for life insurance? I only thought it’s about my health?”
In this article, I’ll explain why the carrier asks this question, the rates you should expect if you have a family history, and what other diseases some companies are asking for.
Why Do Insurers Care About Family Health History?
Your genetic predisposition can increase the likelihood of developing certain diseases, which are often inherited from a parent. Diseases like cancer or diabetes can contribute to early death, and this is something the insurance companies are trying to identify early in the process.
The underwriter’s job is to determine the risk you pose to the company and decide whether you are insurable and what classification you’ll receive, which ultimately decides your premium. Most insurance companies are concerned about two factors:
- Whether one of your immediate family (parents, siblings) died from a genetic disease
- At what age they died
Which Family Health Issues Matter?
First, it’s important to mention that each company has its own unique underwriting guidelines which they use to evaluate one’s risk. Where one company cares about no death in parents prior to age 60, others will want to see prior to age 65.
Second, most companies also differ in the health issues they are asking about. For instance, some will ask about cancer, heart disease, and stroke, while others will add diabetes, Huntington’s disease, or polycystic kidney disease.
This is another good reason for you to use an insurance broker who specializes with many companies, so he/she can place you with the appropriate company for your situation. Nonetheless, I will share the underlying health issues that matter most to the companies:
- Cardiovascular disease (heart disease)
- Cerebrovascular disease (stroke)
- Certain cancers limited to breast, colon, prostate, ovarian, melanoma, and lung cancers. However, they will disregard gender-specific diseases. For example, if the applicant is a male, they will ignore the death of a parent from breast cancer.
Takeaway: As you can see, insurance companies are only looking at lifestyle diseases because we have total control over it. Lifestyle diseases are linked to the way we choose to live. Alcohol consumption, smoking, dietary choices, and not exercising are choices we make that contribute to cancer, obesity, and heart disease which often result in death at a younger age. It’s hard to admit sometimes that it is our responsibility.
Can They Ask Me About My Family Health History?
Yes, they can ask this question. This question has to do with your application for life insurance and the risk that you pose since it increases your probability to experience a similar event. The insurance company isn’t asking you to provide medical records on your father, or even about the prognosis or treatment plan he had while undergoing melanoma (after all, he isn’t applying for coverage).
They are merely asking if anyone in your immediate family been diagnosed or treated for cancer, stroke, or coronary artery disease and at what age they passed away.
When Family Health History Doesn’t Matter
There are a few times in which you would not be required to answer questions about your family health history:
- If you were adopted: The underwriter knows you do not have access to your family’s health history, and consequently, are unable to answer the question accurately.
- If you are over a certain age: Most companies ignore the family history question if an applicant is between the ages of 60–70. As mentioned above some ignore it if the applicant over the age of 60 while others 65 years or 70.
- If you apply for a simplified issue policy: Final expense policies, which have a lower face amount, do not require an exam and also do not have a family history question on the application. Instead, they have a few health questions that precisely relate to your health history and not your family’s.
How Does Family History Affect My Premiums?
The number of immediate family members who have died and at what age they died will have a bearing on the rate class for which you would qualify. If your dad died at the age of 58 due to testicular cancer or at the age of 62 could be the difference between Preferred Plus or Standard Plus rates, which can be equivalent to about a 50% increase over the best rates.
Note that there isn’t any family history that can result in denial of your application. The worst rate class you can get is Standard. Your overall health will still be the leading factor in deciding the life insurance rates you can get.
Why do I need to pay more for my parents’ poor lifestyle choices? This may seem like an unfair process the companies are using to charge you more for someone else problems. Is it? The insurance companies are only interested in knowing about diagnosed hereditary conditions.
Their explanation is that genetic disease increases your mortality risk and, therefore, can result in the same experience your parent had. Many doctors are doing the same thing when you get a colonoscopy, for example. They ask about your family history and then decide the age and how often (every 5–10 years) to undergo the procedure.
There are many moving parts when a company underwrites an individual for coverage, and family history is just one of those pieces. We work with more than 50 companies and believe that there is no one company that fits everyone.