For clients, navigating the complexities of getting life insurance coverage while being treated for a chronic illness, like cancer or diabetes, can be overwhelming. Advisors play a crucial role in helping these clients secure the coverage they need, but it requires a balance of empathy, expertise, and strategic planning. 

Coverage for pre-existing conditions: Setting the right expectations

Most clients know that health insurers have an obligation to cover pre-existing conditions but don’t realize that the same is not true for life insurance. In fact, some conditions may impact an individual’s ability to secure coverage or increase the cost of insurance. Carriers assess insurability through a comprehensive underwriting process that involves evaluating the specific details of the individual's health condition, such as:

• Diagnosis
• Illness severity
• Treatment history
• Prognosis
• Health management
• Age
• Lifestyle choices

This information helps insurers calculate the risk associated with providing coverage, determining premiums, policy terms, or, in some cases, whether to approve or deny coverage. 

It’s essential to ensure clients understand that there is a possibility they could be denied coverage or receive higher-than-expected rates. However, advisors and their brokerage partners can advocate for their clients to help increase their chances of getting covered. 

The underwriting process

Advisors should prepare their clients for an underwriting process that can often be extensive. For those with chronic illnesses like cancer and diabetes, underwriting questions often focus on the specific details of their health condition.

Cancer

If an individual has been diagnosed with cancer, the carrier may ask questions about the type of cancer, its stage, the prognosis, and the treatment plan. Carriers take into account the severity of the illness, so, for example, someone with stage two pancreatic cancer may be denied coverage because of the high mortality rate associated with the type of cancer. In contrast, someone with basal cell carcinoma, a common type of skin cancer, may still get coverage because there is a 95% recurrence-free cure rate with appropriate treatment. 

Carriers will also ask questions about the client's lifestyle, such as whether they can still work and perform daily tasks during treatment.

For clients who were diagnosed with cancer but are in remission, the carrier is likely to require information about their prognosis, the last date of treatment, current medications, as well as their current health plan with their doctor.

Diabetes

As with cancer, carriers determine insurability and rates based on the type and severity of a diabetes diagnosis. Clients with Type I diabetes may have a more difficult time securing coverage compared to Type II diabetes. This is because Type II diabetes can be more treatable or even curable, in some circumstances, with diet and exercise. 

In addition to the type, carriers may also want to know the client’s most recent A1C reading, date of diagnosis, age at onset, any medications currently prescribed, and the frequency of check-ups with their doctor. Various comorbidities also affect diabetes management, such as the client’s build-up and tobacco usage.  

Clients can also be diagnosed with pre-diabetes, which is a condition where blood sugar levels are higher than average but not quite high enough to be diagnosed as Type II diabetes. Pre-diabetes is not quite as severe and is generally looked at more favorably than diabetes, but the carriers will want to know the same basic information as outlined above.

Medical marijuana

For clients with chronic illnesses, including some forms of cancer, medical marijuana is commonly prescribed as a form of therapy. While marijuana is considered a Schedule I drug by the federal government, 38 states have approved its use for medical treatment, while 24 states have approved recreational usage (as of 2024).  Clients must be honest about both legal and illegal drug usage, including medical marijuana. Some clients may be hesitant to admit to using medical marijuana, even when prescribed by a doctor. With that in mind, if a carrier determines that a client had lied or withheld information on an application for whatever reason, they can be denied coverage or provided with a reduced benefit.  

In many cases, carriers may care more about a potential underlying condition that the marijuana may be used to treat rather than the actual usage itself. Clients should understand that, when properly prescribed by a doctor, those who use medical marijuana may still be able to secure standard or even preferred rates, depending on the reason for the treatment, dosage, and other considerations. 

Gathering documents and information

Advisors and clients should work to gather all the documents and information they will need for the life insurance application to help the process go more smoothly. This could include:

• A cover letter: A good cover letter can go a long way in helping to provide additional context to the carriers. For example, advisors can mention that the client is dieting, exercising, and attending regular checkups to help care for themselves and increase their quality of life, which naturally leads to better overall health in many cases. This can help an underwriter get a more complete client profile instead of relying solely on medical records to make a decision.  
• Medical records: Detailed medical records that outline the diagnosis, treatment history, and current status of the pre-existing condition are generally required for the carrier underwriter to reach a decision. 
• Medication history: Compile a list of all current and past medications, including dosages and duration of use. This information helps insurers assess the management and control of the pre-existing condition.
• Physician statements: Request statements from treating physicians that provide additional insights into the client's health, treatment progress, and prognosis. 
• Diagnostic tests: Include relevant diagnostic test results, like laboratory reports and imaging studies, that can contribute to a more thorough assessment.
• Lifestyle information: Provide information about lifestyle factors, including diet, exercise, and any efforts to manage and improve overall health. Proactive lifestyle choices may positively influence the underwriting decision.

By assembling these documents, advisors can streamline the underwriting process, helping life insurance carriers make informed decisions about coverage and terms based on a comprehensive understanding of the individual's health profile. 

Denial of coverage: What can be done?

If a client is initially denied coverage, several steps can be taken to address the situation:

• Appealing the decision: Advisors can appeal the denial on their client’s behalf by submitting additional information or addressing any inaccuracies in the initial application. 
• Requesting more information: Clients and their advisors can inquire about the specific reasons for the denial from the insurance carrier. Understanding why the application was denied can help provide insights into additional documentation that can be used to support their case. 
• Exploring guaranteed issue or simplified issue products: Some insurance carriers offer guaranteed issue or simplified issue life insurance products with more lenient underwriting requirements that don’t require a detailed medical examination. While the premiums of these products may be higher, they may provide an alternative if traditional coverage is not obtainable or if a denial was previously issued.
• Considering a survivorship policy (for married clients): Married clients can explore survivorship life insurance, which covers two people, usually spouses, but only pays the death benefits after both individuals have died. The underwriting process for survivorship policies may be less restrictive, making it a viable option for clients facing challenges with individual coverage.

Case study

Using the strategies outlined above and by working with a brokerage like Modern Life that specializes in impaired risk cases, advisors can achieve positive outcomes that help secure the financial security of their clients. For example, Modern Life achieved standard coverage for a man with a stroke history with innovative underwriting techniques.

A Modern Life advisor, Jared Levy from Brix Partners, approached us for assistance with a 46-year-old client who had been denied coverage because of a stroke history with atrial fibrillation (A-fib). Following the stroke, the client had a loop recorder implanted to monitor his heart for A-fib. 

Modern Life’s medical director reviewed the client's records and loop recordings, discovering the client was incorrectly diagnosed due to a false positive on the recordings. With these findings, we created a cover letter detailing the new information with clinical support from the medical director.

With this approach, we secured a standard offer from a top carrier and had the policy issued within seven days of the application submission.

Next steps

Securing coverage for clients with serious illnesses doesn’t need to be overly complex. A tech-enabled life insurance brokerage, like Modern Life, helps to streamline the entire process from client intake to quoting and application submissions. Advisors can also use our client fact finder to gather information to submit an informal trial application to get quotes. Here’s how:

• Easy client intake: With digital intake forms, which an advisor can share, clients can provide all necessary information and documentation from home, ensuring they have their medical records handy and minimizing potentially awkward conversations around medical history and lifestyle choices. In turn, this helps ensure an honest and complete application process. 
• Document management: Applications for impaired risk cases may require more documentation and support. Modern Life’s single point of reference ensures paperwork doesn’t slip through the cracks, helping advisors and their teams stay organized and proactive.
• Status & requirement tracking: View status updates and requirements for each case in real time to stay up-to-date, expedite the underwriting process, and proactively engage with clients. 
• Product choice: We partner with over 30 of the nation’s top carriers to provide a diverse range of products, including term, permanent, long term care, and disability. Advisors can also quickly compare quotes to find the best options that align with client preferences and needs.
• Responsive brokerage support: Modern Life provides dedicated support, ensuring advisors receive the assistance they need. This support results in faster approval times and cost savings for your clients. 

To see our tech platform in action, fill out the demo form below.