How Does Your Family History Affect Life Insurance Rates?
Quick Summary: Life insurance rates for people with a family history of health conditions vary widely based on the type of conditions their family members had, what age they developed them, and if any other complications or death have arisen from these conditions. Some carriers will weigh family history more heavily than others during the underwriting process.What you will learn in this article (click to go to section):
- Can I Get Life Insurance if I Have a Family History of Medical Conditions?
- What Factors Influence Insurance Premiums?
- What Do Life Insurance Companies Look for with Family History?
- How Family Health Affects Life Insurance Rates
- Gender Specific Health Conditions in the Family
- How Age Comes into Play
- What if You Are Denied Coverage?
- Finding the Best Life Insurance Coverage
Can I Get Life Insurance if I Have a Family History of Medical Conditions?
Yes, you absolutely can.
A family history just means there is a genetic risk in your family for certain conditions. Companies might charge you more for your premiums or offer you term only policies, or they might only focus on what you are doing to mitigate your personal risk.
What Factors Influence Life Insurance Premiums?
There are many factors that life insurance companies take into consideration when determining what policies to provide applicants—if any. Life insurance companies are just that: companies. They need to turn a profit to stay in business.
As a result, they want to make money from the clients they have before they have to pay out a large settlement.
In fact:
If the companies were unable to profit from the clients they have by way of premiums, they wouldn’t have the money necessary to pay off death benefits once a beneficiary made a claim.
To determine how your monthly premiums for life insurance coverage, companies use equations with multiple variables. Those variables are responsible for determining the risk you pose—meaning, how likely it is that you will pass away within X number of years (with X being the number of years necessary for your premiums to cover your death benefit).
As a result, health history and family history affect rates, because they are a strong determinant of your life expectancy.
Put simply:
If you have conditions or your family has a history of health conditions, you will likely experience higher premiums, as you have a lower life expectancy and thus become a bigger risk to an insurance company.
Variables That Affect Life Insurance Rates (Besides Family History)
On top of family history, there are other factors weighing in on your life insurance rates and risk classification. Before we dive into how family history affects life insurance rates, let’s take a quick look at each of these other factors and how they affect premiums.
Your Job
If you have a risky job where you deal with a lot of dangerous equipment or you fly a plane, you are at a higher risk for an unexpected death which means you might not ever reach the X.
Your Hobbies
You might be a perfectly healthy, safe person who works in an office but you like to go skydiving and rock climbing in your spare time. These activities are things which have a high risk of things like equipment failure and unexpected death.
Your Age
The older you are, the more likely you are to reach that X point sooner rather than later, and the more companies need to charge you.
Your Gender
Women statistically live longer than men, so women have a few more years to meet that X point than men which is why men pay more.
Your Health
What level of health you have currently and what your medical records say about your long-term health says a lot about how you take care of yourself.
If you have diabetes, high blood pressure, or high cholesterol those are bad factors that increase the risk of subsequent health issues and possible death or disability.
But if you are working hard to take care of those issues, treat them, and reverse the progress (such as losing weight and eating right) then it shows you are putting in efforts to keep yourself healthy and live a long life (hopefully to the X point).
What Do Life Insurance Companies Look for with Family History?
Life insurance companies look at a few things where family history is concerned:
- Whether your parents or your siblings passed away from a genetic disease
- How old they were when they passed
- If your parents and siblings currently living with genetic diseases
- How old they were when they were diagnosed with this disease
- How severe their condition is/was
If, for example, your father passed away from a heart attack at age 65 or 70, it might just be part of the aging process and some life insurance companies will not care.
On the other hand, if he passed away from a heart attack at 59, it might mean a genetic predisposition to which you may very well fall prey.
Life insurance companies place applicants in different health classifications based on things like family history. Most companies only focus on:
- Cancer (all types)
- Type 2 Diabetes
- Coronary Artery Disease
- Cardiovascular Disease
If a parent or sibling passed away early from one of these four, it might put you in a higher risk category and therefore, a higher premium category.
Why Life Insurance Companies Look for These Family Factors
Each life insurance company is different with regard to how they consider family history. Most of the time this applies to applicants younger than 60.
Family, in this case, refers to natural parents and natural siblings. Some companies will, however, only evaluate parents. When they ask about occurrences, they mean diagnoses or treatment for medical conditions before a certain age (usually between 60 and 65 years).
Death means that a family member died specifically because of the medical condition before a certain age. The reason they apply an age cut off is that after a certain point, people are more likely to pass away from medical conditions like heart diseases or cancer simply because of the aging process.
Early or unexpected deaths are more likely to have a genetic component to them.
How Family Health History Affects Life Insurance Rates
Because there is a large variety of health conditions that can affect a family in a wide variety of age groups, narrowing down exactly how family health history impacts rates can be a bit tricky and is probably best suited for an agent who can tell you more about your specific situation.
However, for the purposes of this article, here are a few examples of how the family history of some common health problems affects life insurance rates:
Family History of Kidney Disease
The table below shows life insurance rates for a woman with a family history of kidney disease vs. a woman with no family history. All rates displayed are monthly rates for a 20-year term life insurance policy with a face amount of $500,000. In this case, the family member was her mother, who contracted kidney disease at age 60 and died from it at age 65.
| Age | Policy | Family History | No Family History |
|---|---|---|---|
| 30 | 20-Year Term | $17 | $12 |
| 40 | 20-Year Term | $28 | $17 |
| 50 | 20-Year Term | $54 | $37 |
Family History of Cancer
The table below shows life insurance rates for a man with a family history of cancer vs. a man with no family history. All rates displayed are monthly rates for a 20-year term life insurance policy with a face amount of $500,000. In this case, the family member was his father, who contracted cancer at age 55 and died from it at age 60.
| Age | Policy | Family History | No Family History |
|---|---|---|---|
| 30 | 20-Year Term | $20 | $13 |
| 40 | 20-Year Term | $32 | $19 |
| 50 | 20-Year Term | $74 | $46 |
Family History of Cardiovascular Disease
The table below shows life insurance rates for a man with a family history of cardiovascular disease vs. a man with no family history. All rates displayed are monthly rates for a 20-year term life insurance policy with a face amount of $500,000. In this case, the family member was their father, who contracted cardiovascular disease at age 52 and died from it at age 57.
| Age | Policy | Family History | No Family History |
|---|---|---|---|
| 30 | 20-Year Term | $32 | $13 |
| 40 | 20-Year Term | $33 | $19 |
| 50 | 20-Year Term | $100 | $46 |
Family History of Diabetes
The table below shows life insurance rates for a woman with a family history of diabetes vs. a woman with no family history. All rates displayed are monthly rates for a 20-year term life insurance policy with a face amount of $500,000. In this case, the family member was their mother, who contracted diabetes at age 40 and is still living with it today.
| Age | Policy | Family History | No Family History |
|---|---|---|---|
| 30 | 20-Year Term | $17 | $12 |
| 40 | 20-Year Term | $25 | $17 |
| 50 | 20-Year Term | $54 | $37 |
What About Family History of Gender-Specific Health Conditions?
If you have a family history of something like breast cancer or testicular cancer, most life insurance companies won’t count that, as explained in the chart.
If you are a male, and your mother died of breast cancer, it might not impact you just the same as a female applicant whose father passed away from testicular cancer is not likely to face that particular genetic problem down the line.
Does Age Really Matter When it Comes to Your Family’s Health History?
Yes. It matters a lot.
If your parent died at 64 of heart disease, it might put you in a high-risk category over someone whose parent died at 65 all because the company in question has the cut off at 65 years old. If you have a parent or sibling who passed away at 64, try to find a company with a cut off age of 60 instead of 65.
If your siblings passed away from cancer, it is in your best interest financially to find a company that only concerns itself with natural parents and not siblings.
Obviously, the more you know about your family history and the more you know about various requirements for different companies, the more prepared you can be to find one that affords you optimum coverage and the most affordable premiums for your life insurance policy.
Age Guidelines
You can look at the chart below to see the different condition types and outcomes, but remember that life insurance companies vary by age.
| Preferred Plus | Preferred | Standard | |
|---|---|---|---|
| Company 1 | No cardiovascular disease or cancer occurrence in either parent or sibling before the age of 60. | No cardiovascular disease or cancer death in either parent or sibling before the age of 60. | No cardiovascular disease or cancer death of more than one parent before the age of 60. |
| Company 2 | No cardiovascular disease in either parent or sibling before the age of 65. Only gender-specific cancer is approved. | No cardiovascular disease death in either parent before the age of 65. Only gender-specific cancer is approved. | No more than 1 death in either parent from cardiovascular disease or cancer before the age of 65. Only gender-specific cancer is approved. |
| Company 3 | No cardiovascular disease in either parent before the age of 60. Cancer does not apply. | No cardiovascular death in either parent or siblings before the age of 60. Cancer does not apply. | One or two family deaths before the age of 60. Cancer does not apply. |
What if I am Denied Life Insurance Coverage Because of Family Health History?
If your family history includes lots of medical problems, then you might find your application denied for the standard term and permanent policies.
In such cases, where there is medical history (perhaps combined with current health or lifestyle, even age) that prevent you from getting approval, you can always opt for a guaranteed issue policy.
As the name suggests, these are final expense or burial policies that will guarantee coverage for anyone who applies. They do not ask questions about your health, they do not peer into your medical records, and they do not require a medical exam.
The coverage amount you receive will be much lower; again, the amount is only meant to cover final expenses.
These policies are often referred to as no exam life insurance policies. They are quick and easy to apply for, and offer the most coverage per thousand when it comes to people with health conditions or family histories that cause life insurance rates to quickly become unaffordable.
You can get an average of up to $25,000 of coverage with no exam policies, but some companies give up to $50,000.
The premiums will be much higher (in terms of cost per thousand) for these policies because of the high risk you pose to the companies (it is assumed since they have no information on which to go) so you should only consider this if you absolutely need coverage fast and have no other options at your disposal.
Finding the Best Life Insurance Coverage with Bad Family Health History
When you are applying for life insurance, remember that there are many grey areas where family history is involved.
You might not know both of your birth parents or what caused the death of your mother. You might not know what medical conditions they had when they passed or how old they were. It is important that you gather as much information as you can and be honest with your application.
Because there are so many different health conditions that can run in the family, and they can all affect everyone differently, it can be hard to tell what types of life insurance rates may be available just with a few quick questions.
The best way to learn more about your options is to work with an independent agent who can help you compare rates and policies from dozens of the best life insurance companies on the market.
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