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By Jacques Chambers
(click here to download pdf)
Most people get their health insurance and, often, their life and disability insurance through their employment. This is especially helpful to persons with a medical condition that could otherwise keep them out of insurance. Most plans from employers do not ask health questions for life or disability coverage. By federal law, a person’s health history cannot be used to refuse them health insurance through their employer.
However, in order to purchase individual life, health, or disability income insurance you have to prove, with very few exceptions, that you are healthy through a process the insurance industry calls “medical underwriting.” In this process, the insurance company reviews the person’s medical history, statements from their physicians, and, frequently, the results of a physical exam administered by the insurance company. The company then decides whether or not to sell insurance to the person and at what price. This applies to virtually all types of insurance that you want to purchase individually or for your family from an insurance company or through an insurance agent.
What impact does Hepatitis C have on this process? It depends on the type of coverage desired.
Health Insurance – Because persons with Hepatitis C can be expected to have higher than “normal” medical bills, a person with Hepatitis C, regardless of how well controlled or stable, will not be able to get health insurance if medical underwriting is required. During the medical underwriting process, you will be asked about your current medical condition and your medical history. Once the insurance company sees that you carry HCV, you will be declined for coverage even if you are currently asymptomatic.
Many states offer some form of high risk health insurance for persons who are otherwise unable to purchase health insurance. For those states that offer such an alternative, while it is better than no insurance at all, it often provides limited benefits, it can be very expensive, and many states have a waiting list to join the plan. You can get more information on your state’s plan – if there is one – by contacting your state’s Department of Insurance.
Disability Income Insurance – Likewise, persons with Hepatitis C will be unable to work due to medical problems more often than the average person so insurance companies will generally not accept someone with Hepatitis C for individual disability income insurance.
The best source of disability insurance for a person with Hepatitis C is employer based Long Term Disability (LTD) Insurance. Coverage through an employer rarely requires medical underwriting and is usually given to employees once they have past the Probation Period, regardless of their medical history.
Life Insurance – Unlike health and disability insurance, underwriters who review life insurance applications are interested only in life expectancy, not future medical bills or periods of disability. Because of that life insurance is available for some people dealing with Hepatitis C.
Rating of life insurance – Life insurance companies may choose to accept an applicant who has health issues, but they will increase or “surcharge” the premium rates due to factors that could affect the person’s life expectancy. These policies are called “rated” policies and are offered to persons that the industry labels “impaired risk” as opposed to “standard” or “preferred” risks.
Whether a person with Hepatitis C will be able to buy life insurance depends on several factors:
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Age –The younger the person with Hepatitis C, the more strictly their records will be reviewed, and the more frequently an applicant will be turned down. Here’s one place where age can be an advantage.
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Lifestyle – Underwriters look more favorably on applicants with a healthy lifestyle. There should be no alcohol consumption at all. Not smoking, not overweight, and regular exercise will help also.
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Time since diagnosis – Underwriters prefer applicants who have been diagnosed with Hepatitis C for some time and whose health has been relatively stable. If you are newly diagnosed, chances are the insurance companies will postpone accepting you, sometimes for several years.
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Health of liver –The more damage there is to the liver due to Hepatitis C, the greater the chances you will be refused life insurance. Persons with significant liver fibrosis, cirrhosis, or other irreversible liver damage will be refused insurance. The fewer the liver problems, the greater the chance of getting insurance and the lower the premium.
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Acute viral hepatitis C – People with a history of successful treatment, no current symptoms, and normal liver function test results may be able to purchase life insurance with only a slight surcharge to the “standard” rate. Even then, they will probably be “rated” up to a Table 2 or higher rate. Each table increases the “standard rate” by 25%. Table 2 would be rates 50% over the standard rate; Table 4 would be rates that are double the standard rate.
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Chronic hepatitis C – Persons dealing with chronic hepatitis will have more problems getting life insurance. Most insurance companies refuse coverage to anyone in this group. A few carriers will write coverage with a slight rate surcharge if the insured can show a history of successful treatment. The insurance company will almost always require a current liver biopsy before making their decision.
If you are interested in purchasing life insurance, you need to find an insurance agent that is familiar with the “impaired risk” life insurance market. This may be an individual or a complete insurance agency. This is probably not the neighborhood life agent, but if you know one, it is a good place to start.
You will know when you have located someone who knows impaired risks when you are asked details of your medical condition. The impaired risk specialist knows that the more details on your medical condition he/she can provide the underwriters at the different insurance companies, the greater the chance of finding a carrier that will consider the application. Other ways of finding an impaired risk specialist is to check the Yellow Pages of your phone book or conduct a websearch for “impaired risk insurance”.
Contesting a Misrepresentation on the Application – Some people may think that if there is no physical exam, they can answer the health questions in any way that will guarantee coverage. That will not work. Virtually all insurance policies can be “contested” by the insurance company if they find evidence that you didn’t tell the truth on the application. Most states limit this “contestable period” to the first two or three years of the policy’s existence.
If, during the contestable period,” the insurance company finds evidence that you did not tell the truth on the application about a matter that would have affected their decision, they have a right to terminate the policy back to its effective date and refund any premiums paid by you less any claims they have already paid.
If you are uninsurable for life insurance, it may still be possible to purchase some life insurance. Life insurance that comes through an employer as part of the employee benefits almost always provides a basic amount of life insurance without any health questions.
There is also a product called “Modified Life Insurance” or “Guarantee Issue Life Insurance” (See the article “ Guarantee Issue Health Insurance (2005) ” on the HCV Advocate website. Available in most states, it is life insurance that does not require answering any health questions at all. However, if you die within the first two or three years of coverage, depending on the policy, then the company will only return the premiums you have paid in plus interest. The true “death benefit” becomes payable if you pass away after the initial period.
Confused about applying for disability? Click here
[Jacques Chambers, CLU, and his company, Chambers Benefits Consulting, have over 35 years of experience in health, life and disability insurance and Social Security disability benefits. For the past twelve years, he has been assisting people with their rights, problems, and other issues concerning benefits and disability. He can be reached at jacques@helpwithbenefits.com or through his website at: http://www.helpwithbenefits.com.]
Copyright, (December, 2005) Hepatitis C Support Project / HCV Advocate www.hcvadvocate.org. All Rights Reserved. Reprint is granted and encouraged with credit to the Hepatitis C Support Project
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